British airport operator faces sale of two London airports (Roundup)

Aug 20, 2008, 13:33 GMT

London/Essen (dpa ) - The British airport company BAA faces having to sell two of its three London airports, most likely Gatwick and Stansted, the British Competition Commission said Wednesday, rekindling the interest by German Hochtief company to buy Gatwick.

The commission, which monitors competition standards, said in a preliminary report due to be confirmed in April, that the airport operator should sell two of either Heathrow, Gatwick or Stansted airports.

The watchdog also recommended that the BAA give up one of its two Scottish airports, Edinburgh or Glasgow. In total, BAA runs seven British airports.

The final decision over the future of the airports would be taken in April, said the commission, which had found that the single ownership of Britain's leading airports was having 'adverse consequences' on air traffic for passengers and airlines.

Reacting to the report, BAA chief Colin Matthews said the company would not sell Heathrow, yet he conceded the watchdog's findings on 'poor service' and 'frustration' for passengers.

In Germany, the Essen-based Hochtief company said it continued to have a 'great interest' in Gatwick, the UK's second largest airport. However, it remained unclear at this time when and under which conditions the company would get involved, a spokeswoman said.

In principle, however, the company was interested also in other airports should they become available, she said.

'We will look at all of them', she said, adding further steps were expected in the autumn.

BAA, which belongs to the Spanish Grupo Ferrovial, has come under pressure in recent years over delays and service standards. The report especially blamed the company for slow responses to passenger concerns and the failure to expand the airports' capacities.

Besides the German company Hochtief, the British airport operator Manchester Airport Group expressed an interest for one of the three London hubs, which process 90 per cent of all air traffic into London.

The group, which operates airports in Manchester, Bournemouth, East Midlands and Humberside, said it was considering 'one or more' BAA airports.

Hochtief had said in the past it wanted to expand its operations and concessions business which also includes airports. The companies is currently considering stakes in the airports of Riga, St Petersburg and possibly also Prague.

The British Competition Commission does not explicitly recommend the sale of Gatwick and Stansted, but BAA has made clear it was opposed to selling Heathrow.

The company also accused the watchdog of mistakes in their judgement and said an airport sale would be counterproductive.

Airlines including Ryanair, Virgin Atlantic Airways and Easyjet welcomed the commission's findings.