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COMPETITION chiefs are demanding a major shake-up of the ownership of some of Britain's largest airports.

They have signalled the break-up of BAA's UK airport empire by proposing that the company ceases running two of its three London airports, including Gatwick.

The Competition Commission (CC) also recommended that Spanish-owned BAA lose control of either Edinburgh or Glasgow airport.

In a preliminary report published today, the CC said there were competition problems at each of BAA's seven UK airports "with adverse consequences for passengers and airlines".

The CC report - with a final report on BAA's airport ownership due at the end of the year - effectively means that BAA will have to give up running Gatwick and Stansted as the commission made it clear that it is "unlikely to require the divestiture of Heathrow unless the sale of Gatwick or Stansted is likely to be impractical or ineffective".

BAA also runs Southampton and Aberdeen airports.

BAA was also critical of the Government aviation policy saying "aspects of Government policy restrict or distort competition by contributing to the current capacity constraints at BAA's London airports".

BAA chief executive Colin Matthews said: "By calling not just for a fundamental restructure of BAA but also for a review of the Government's air transport White Paper, the commission risks delaying the delivery of new runways and making better customer service less, not more, likely."

The CC said as well as now consulting to see which airports need to be sold, it was also seeking views on the need for "some form of enhanced regulation at Heathrow.

The CC said that it believed that "separate owners would be more active than BAA in exploiting existing opportunities" at South East England airports.

The commission also said there were competition problems arising from the existing planning system and the system of regulation for airports which is under the control of the Civil Aviation Authority.

Responding to today's report, Brendon Sewill, chairman of Gatwick Area Conservation Campaign, said: The important thing for local residents - everyone who lives within 20 miles of Gatwick - is to ensure that if there is more competition it does not result in each airport cutting the corner on environmental protection.'

GACC would be pressing West Sussex County Council and Crawley Borough Council to insist on tough rules about noise and pollution, he said.

"The good news is that the Competition Commission have dropped their previous naïve suggestion that a new owner of Gatwick would be more likely to get planning permission for a second runway.

"We would like to think that the evidence we submitted has convinced them that a second runway is a dead duck that will never fly.'

Mr Sewill said it was welcome that the Commission now recognised that "medium to large increases in airport capacity may result in a significant deterioration of the local environment and quality of life. The planning system is therefore a major factor in airport development, certainly in respect of investment in new runways and reflects the serious environmental and social consequences of such developments."

However, Mr Sewill said the report was still lop-sided in that it make no reference to climate change or to the higher cost of oil.

8:29am Wednesday 20th August 2008

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