Page last updated at 11:20 GMT, Wednesday, 17 December 2008

'No rationale' for airport sale

Edinburgh Airport
Edinburgh has the largest airport in Scotland

There is no justification for forcing BAA to sell Edinburgh Airport, its managing director has claimed.

BAA is almost certain to be ordered to sell three airports, including Edinburgh, by the Competition Commissioner.

But Edinburgh Airport managing director Gordon Dewar told BBC Scotland there was no evidence the move would increase competition with Glasgow Airport.

The commission has said the move is necessary to improve airport services.

It had been expected to require BAA to sell either Glasgow or Edinburgh airports, before eventually deciding to focus on Edinburgh, which will need to be sold along with Stansted and Gatwick, subject to a final consultation.

BAA also own the airport in Aberdeen, which is likely to be told to introduce measures to promote investment linked to rebates on charges. This would be in response to the commission's findings that Aberdeen suffers from under-investment despite BAA making excessive profit per-passenger there.

But Mr Dewar told BBC Radio's Good Morning Scotland programme he had not given up hope the decision could still be reversed and BAA would not have to sell either Edinburgh or Glasgow.

We have not given up that fight by any stretch of the imagination
Gordon Dewar
BAA
He added: "We are looking still for the justification for a forced sale - we don't think the evidence is there and we don't think the case has been made, and we are totally surprised by the suggestion that we may be forced to sell either airport.

"We have to remember that we are still not at the end of the process yet. This is still a consultation phase, so we have not given up that fight by any stretch of the imagination.

"It is important that we make our case, and I think it is also important that the Competition Commission starts listening to some of the stakeholders in Scotland that it has so roundly ignored to date.

"It is quite striking that they quote a handful of people that are calling for break-up and utterly ignore the great majority of stakeholders in Scotland, including the Scottish Council for Development and Industry, Chambers of Commerce, various councils and other bodies who have all argued not for break-up, and certainly I think will be even more surprised to hear that the Competition Commission feels it can recommend which one."

Most profitable

The Competition Commission has pointed to figures which show only about one in 20 passengers flying from Glasgow is from the east of Scotland, with only one in 25 who use Edinburgh coming from the west.

This has been used as evidence of a lack of effective competition between the two airports.

But Mr Dewar claimed: "That data shows exactly that there can be no competition because people choose to use their local airport. The airlines understand it because they duplicate the same destinations from both airports. Separate ownership would have no impact on that whatsoever."

He said he had "no doubts" there would be considerable interest in buying Edinburgh Airport, which is the largest and most profitable in Scotland.

The Competition Commission says the move will improve airport services

Mr Dewar added: "The point is you have to have a reason for a forced sale - it has never happened before, the forced split-up of an ongoing concern, and the data is just not there to justify it.

"There is no evidence it will benefit the passengers of the airlines and in fact if anything it puts a huge cost and additional risk into the ongoing investment profile that we have and the commitments we have on pricing."

Liz Cameron, chief executive of Scottish Chambers of Commerce, accused the Competition Commission of "failing to recognise the realities of the airport market in Scotland".

She added: "In London, BAA's three airports serve a single market, but in Scotland their three airports at Aberdeen, Edinburgh and Glasgow serve three very distinct markets.

"We have repeatedly given evidence to the commission demonstrating the fact that a change of ownership in any of BAA's Scottish airports will not necessarily have any effect on a passenger's choice of airport, but they have failed time and again to convincingly counter this argument.

"BAA have invested heavily in Scotland's airport infrastructure and services over many years and have firm plans to continue to invest in the future. It is essential for Scotland's economy that this investment in our transport system takes place, particularly in these challenging times."

A spokesman for Aberdeen Airport said it would "carefully consider" the that the Competition Commission proposed.H

He said: "We are keen to better understand the potential implications for Aberdeen and the UK regional airports market of the proposal to introduce a form of interim price regulation and are specifically interested in the on-going need for a level playing field."



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