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Court of Appeal reinstates Competition Commission's order for BAA to sell two airports

14-Oct-2010 10:14 AM

UK's Court of Appeal upheld and reinstated (13-Oct-2010) the UK Competition Commission's (CC) Mar-2009 decision that BAA must sell London Stansted Airport and either Glasgow or Edinburgh airports. BAA previously appealed to the Competition Appeal Tribunal (CAT) in Dec-2009 on alleged apparent bias, due to the participation of Professor Peter Moizer in the CC's panel to assess if an adverse effect on competition existed in BAA's ownership of UK airports. Professor Moizer was also an external advisor to the Greater Manchester Pension Fund, which owned potential London Gatwick Airport buyer, Manchester Airport Group (MAG). However, the Court of Appeal overturned the CAT's decision, stating it was "wrong to find apparent bias" as Professor Moizer's involvement was too late in the process to have affected the CC's original decision (Bloomberg/telegraph.co.uk, 13-Oct-2010). BAA sold Gatwick for GBP1.5 billion in Oct-2009, which was also an airport the CC had ordered BAA to sell (Reuters, 13-Oct-2010). [more - Court of Appeal]

  • The Competition Commission welcomed (13-Oct-2010) the decision. [more - Competition Commission]
  • BAA announced (13-Oct-2010) plans to now appeal the decision to the Supreme Court, stating the Court of Appeal did accept that apparent bias existed during part of the Commission’s investigation. [more]
  • Ryanair also welcomed (13-Oct-2010) the decision, stating the sale of the airports will promote competition and a better deal for airport users and passengers. [more]

Competition Commission: “We are pleased that the Court of Appeal has found in our favour in the BAA case. The effect of this decision is to restore in full our Report together with its remedies including the requirement for BAA to sell Stansted and either Edinburgh or Glasgow airports, Gatwick having already been sold. Our intention now is to work with BAA to implement these measures in the interests of the travelling public. We take very seriously the need for our inquiry panels to be completely impartial. We have already tightened our procedures and in January of this year we commissioned a comprehensive, independent, review chaired by Dr Brian Woods-Scawen of our rules and procedures on conflicts of interest. We shall now be taking further action on the basis of its recommendations to prevent any recurrence of this kind of issue,” Company Statement. Source: Competition Commission, 13-Oct-2010.

BAA: "We are disappointed that the Court of Appeal has upheld two of the five grounds argued by the Competition Commission. We note the Court’s view that apparent bias in relation to a panel member existed during part of the Commission’s investigation and will study this judgment carefully. We will be seeking permission to appeal to the Supreme Court," Company Statement. Source: BAA, 13-Oct-2010.

Ryanair: “Today’s Court of Appeal ruling to dismiss the BAA’s appeal is a great result for competition, consumer choice and passengers. Ryanair has fought long and hard for the break-up of the high cost, inefficient BAA airport monopoly, and we welcome today’s ruling which vindicates the original findings of the Competition Commission. We hope that Ferrovial, the Spanish owners of the BAA airport monopoly, will now accept this Court of Appeal ruling and move quickly to sell Stansted and Glasgow airports, so that more competition and a better deal for consumers can be ushered in as soon as possible. Over the past three years, traffic at Stansted Airport has declined from a high of 24 million passengers to just 18 million passengers in 2010. This was entirely due to the BAA’s high and rising prices, and the hopelessly ineffective regulatory regime run by the CAA which was long ago captured by the BAA monopoly. Ryanair congratulates the Competition Commission on successfully overturning the BAA monopoly’s appeal, and we call again for the early disposal of Stansted and Glasgow airports, which will transform consumer choice, airport competition and will lower air fares for millions of passengers and visitors to the London and Scottish airports,” Michael O'Leary, CEO. Source: Ryanair, 13-Oct-2010.