BAA response to Competition Commission decision

BAA Chief Executive Colin Matthews said:

"We are dismayed that the Competition Commission's final decision still requires BAA to sell Stansted and either Glasgow or Edinburgh airport. The Competition Commission has not recognised that the world and BAA have changed. This decision would damage our company which is investing strongly in UK jobs and growth. We have a responsibility to protect our shareholders' investment and we will now consider a judicial review of the Competition Commission's decision."

The world has changed since the Competition Commission's March 2009 decision:

A new Government has changed aviation policy to rule out any new runway capacity in the South East and BAA has sold Gatwick Airport. Both are significant changes to the airport market. Further, the airports in question face increased competition from non-BAA airports, particularly those in Europe, for the business of low cost carriers who now take a pan-European view of the market. It is also clearer now than it has ever been that Heathrow and Stansted serve different markets.

BAA has changed since the Competition Commission's March 2009 decision:

BAA's owners have invested £5 billion in UK airports since acquiring the company in 2006 (including over £300 million at Stansted), and are currently investing a further £1 billion a year. BAA's operational performance has improved: security queues are shorter; baggage delivery is more reliable; and flight punctuality has hit record levels. Passenger surveys show that customers recognise the improvements.

Notes to editors:

1. Being forced to sell airports in a difficult market could destroy shareholder value. The new owners of Gatwick paid themselves a £350.5m dividend on 2 March 2011, just 15 months after buying the airport from BAA for £1.5 billion.

2. BAA has invested £5 billion through its capital programme since 2006. This is separate to BAA shareholders' initial investment to acquire BAA. The investment in the new Heathrow Terminal 2 alone is the largest private-sector construction project in the UK. BAA has invested over £300 million at Stansted since 2006.

3. Low cost carriers increasingly focus on other markets in Europe. For example, Ryanair's annual growth rate in passengers at UK airports was just 1% between 2006 and 2010, but 39% in Spain and the Canary Islands, and 22% in Italy.

4. Passengers' experience of Heathrow and Stansted has improved:

- Security queues are shorter. When the shareholders acquired BAA in 2006, passengers queued for less than 10 minutes just 61% of the time at some security areas at Heathrow. Today passengers queue for less than 10 minutes more than 99% of the time. Stansted has met the CAA's target for security queue times ever since it was introduced in 2009.

- Baggage delivery is more reliable. When the shareholders acquired BAA in 2006, as many as 50 in every 1,000 bags misconnected at Heathrow. Today that figure has fallen to 17 in every 1,000 bags. Stansted has met the CAA's target for baggage system reliability ever since it was introduced in 2009.

- Flight punctuality is better. At the start of 2007, just over 60% of flights from Heathrow departed within 15 minutes of their schedule. Today, 74% do so. At Stansted, 70% of flights departed with 15 minutes of their scheduled departure time in 2006. In the first quarter of this year, 86% of flights departed within 15 minutes of their schedule.

- Passenger surveys show passengers recognise the improvements. Passengers' views are measured by the independent Airport Service Quality (ASQ) survey which asks passengers about their experience at BAA's airports and compares answers to those from passengers at other airports across the world. At the start of 2006 only 39% of passengers rated their journey through Heathrow as 'very good' or 'excellent', whereas in the first quarter of this year 68% did so. Stansted's positive ratings increased from 55% in 2006 to 64% in the first quarter of 2011. Stansted has also won the Skytrax 'World's Best Low Cost Airport' award for 2011. The survey is based on feedback from over 11 million passengers.

5. Edinburgh Airport is halfway through a £100m investment programme that has seen a £42m extension to its departure lounge. Edinburgh Airport was voted 'Best Airport in Europe 5m-10m' by ACI in 2011. It has added over 20 new routes this year alone.

6. Since 2006 more than £60 million has been invested in developing and improving Glasgow Airport. Developments have included a £10 million international pier extension and a £31 million terminal extension. A further £200 million will be invested over the next 10 years to build on these improvements.