BAA Ordered to Sell Stansted Airport

July 28, 2012 /

The Court of Appeal in UK has decided to uphold the order to require BAA to sell Stansted Airport.

On 29 March 2007, the Office of Fair Trading made a reference to the CC under section 131 of the Enterprise Act 2002 concerning the supply of airport services by BAA in the UK. The CC published its report entitled BAA airports market investigation on 19 March 2009.

BAA appealed aspects of the CC’s decision to the CAT, and on 21 December 2009 the CAT found that BAA’s application for review of the report succeeded on one ground (namely, apparent bias), but failed on a second ground (namely, that the CC failed properly to apply the proportionality principles when fixing the timetable for divestiture of three BAA airports).

Laura Carstensen, Chairman of the BAA Remedies Implementation Group and a member of the original Inquiry Group, said: “We are pleased that our decision on Stansted Airport has once again been upheld. It remains the right decision in the interests of passengers and airlines and it is surely now time for BAA to accept the verdict and proceed with the sale.”

BAA wound up the sale of Edinburgh Airport to Global Infrastructure Partners (GIP) last April, the second of three airport sales required by the CC following its 2009 report into BAA’s ownership of seven UK airports. GIP bought Gatwick Airport from BAA in December 2009.

Following a number of legal challenges and a CC reassessment of the original decision, the CC brought forward in October 2011 the requirement for BAA to sell either Edinburgh or Glasgow Airport whilst BAA continued to challenge the sale of Stansted Airport.

The Competition Appeal Tribunal (CAT) had already upheld the CC’s decision in February 2012. The CC appealed against the CAT’s decision on apparent bias. On 13 October 2010 the Court of Appeal upheld the CC’s appeal against the decision of the CAT, restoring in full the report together with its remedies. On 18 February 2011, the Supreme Court refused BAA permission to appeal further.

In July 2011, the CC concluded a consideration of whether there had been any material changes in circumstances since it published its final report on BAA in March 2009 that should give it cause to reconsider the implementation of the airport sales required by that original decision.

The CC concluded that the sale of the airports was fully justified and that passengers and airlines would benefit from greater competition with the airports under separate ownership, despite the current Government’s decision to rule out new runways at any of the London airports.

 

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