BAA to abandon Stansted sale flight

BAA is to give up its long legal battle over the forced sale of Stansted Airport (Reuters)

Airport operator BAA is to give up its long legal battle over the forced sale of Stansted Airport.

The company, which recently lost a Court of Appeal ruling over Stansted, said it would not make a further appeal and would proceed with the sale of the Essex airport.

The Competition Commission (CC) had originally ruled that BAA must sell Gatwick, Stansted and one of its Scottish airports following an inquiry into the company's airport ownership.

BAA said today: "We still believe that the CC ruling fails to recognise that Stansted and Heathrow serve different markets."

The BAA decision today ends a process which began as far back as March 2007 when the Office of Fair Trading referred BAA airport services to the CC.

The CC ruling that BAA must sell off Gatwick, Stansted and one of either Glasgow or Edinburgh Airports was made in March 2009.

Gatwick was sold to Global Infrastructure Partnerships (GIP) in December 2009 and GIP also took over Edinburgh Airport last year.

BAA mounted a series of legal challenges to the CC ruling, with the latest one - against the sale of Stansted - ending in defeat at the High Court in July this year.

After that latest loss, BAA said it would appeal to the Supreme Court but today the Spanish-owned company signalled an end to its fight to hang on to Stansted.

BAA, which formerly ran seven UK airports, will have responsibility for just four - Heathrow, Southampton, Glasgow and Aberdeen - once the Stansted sale is concluded.

In its report in 2009, the CC had said that at its south east England airports, BAA had shown "a lack of responsiveness to the interests of airlines and passengers that we would not expect to see in a business competing in a well-functioning market".

Today, Brian Ross, economics adviser to protest group Stop Stansted Expansion (SSE), said: "We are pleased with this outcome. Historically the expansion of Stansted has been cross-subsidised by Heathrow. This type of cross-subsidisation will not be an option in future and that means we can all breathe a little easier."

He went on: "The prolonged period of uncertainty over Stansted's ownership has been unsettling for the airport's employees, unhelpful for the local community and damaging for the airport's business.

"Our hope is that with a new owner there will be an opportunity for genuine and meaningful dialogue based on maximising the local benefits of the airport and minimising its adverse impacts on the community."

SSE believes the Stansted sale process could take around six months, with a price tag of up to £1.2 billion.

Stansted currently handles around 17.5 million passengers and more than 133,000 flights a year.

A total of 16 airlines operate from the Essex airport, flying to more than 150 destinations in 32 countries.

The airport offers work to 10,200 people including 1,400 BAA employees.

The CC welcomed the BAA decision.

Laura Carstensen, chairman of the CC's BAA remedies implementation group and a member of the original CC inquiry group, said: "We are very pleased that BAA has finally agreed to proceed with the sale of Stansted. We believe that both passengers and airlines will benefit from the introduction of new ownership and increased competition."

The CC said it would be closely involved with the sales process "to ensure the suitability of the new owner".

Gatwick Airport chief executive Stewart Wingate said: "Today's decision by BAA on the sale of Stansted is welcome news. Gatwick's transformation over the last two-and-a-half years has clearly shown the real benefit of not being part of BAA.

"However, this is only half the story. The Civil Aviation Authority now needs to remove the unnecessary burden of economic regulation imposed when BAA was a monopoly and which threatens to restrict full competition and investment which will benefit passengers and airlines."

PA