News In Focus
13 December 2006
Scotland's airports anti-competitive, says OFT
The Office of Fair Trading (OFT) has criticised the British Airports Authority's ownership of Scotland's two main aiports, saying it is anti-competitive.
The results of BAA's control of Glasgow and Edinburgh airports are higher costs for air passengers north of the border, says the OFT in a newly published report. It has asked for views on the report to be submitted by 8 February before deciding whether to refer BAA to the Competition Commission.
More than 80% of passenger flights in Scotland go through BAA airports. BAA also has joint ownership of Aberdeen airport, but it sold Prestwick Airport in 1992. The OFT says BAA's ownership of Glasgow and Edinburgh prevents competition, leading to higher charges to airlines than at the company’s London Gatwick and Stansted airports.
However Glasgow, in competition with Prestwick Airport, has had the highest price decrease of BAA’s Scottish airports. And there is evidence, says the report, of better value for passengers resulting from competition between independently owned airports, such as Liverpool and Manchester.
John Fingleton, the OFT Chief Executive, said that the current market structure did not deliver best value for air travellers in the UK. "There is evidence of poor quality and high charges - BAA's investment plans, which are of great importance to the UK, have raised significant concerns among its customers. These are signs of a market not working well for consumers and we believe that a full inquiry into BAA's structure is justified.”
Airline operators such as Ryanair and Virgin Atlantic welcomed the OFT's report. BAA said that if any of its sites were sold off, this could damage long-term investment plans which include rail links to both Glasgow and Edinburgh airports. It also pointed to the number of new routes between Scotland and Europe as evidence of increasing customer choice.
Stephen Baxter of BAA Scotland said he was confident that any investigation would show the company in a good light, revealing how much investment BAA was putting into Scotland's airport infrastructure.