The UK’s Competition Commission may require the British Airports Authority (BAA) to sell Stansted and Edinburgh airports, according to a provisional decision reached by the commission as part of its ongoing inquiry into problems caused by lack of competition at UK airports.
Airports: for sale
The move followed an earlier decision issued by the commission in August requiring the BAA to sell two of the three airports it owns in London – Heathrow, Stansted and Gatwick – and one of its two airports in Scotland – Glasgow and Edinburgh.
The sale of Gatwick is already underway and first-round bids are expected in mid-January. The Royal Bank of Scotland and HSBC are acting as financial advisors to the BAA on the transaction, which has sparked “a lot of interest” from multiple bidders, a BAA spokesperson said, declining to comment further.
The sales of Stansted and Edinburgh would not be required to begin until the commission publishes its final report, due out in March. The commission is seeking final consultation on its decision as it tries to determine whether Edinburgh would be a more attractive sales target than Glasgow.
“At the moment we are hoping for Edinburgh to be sold but we are still open to other views. It is quite a close call at the moment,” said a spokesperson for the commission.
The BAA continues to makes its case to the commission that it should not be required to divest of either Stansted or Edinburgh.
“As we said when the competition commission published its provisional findings in August, we do not believe that it has set out compelling evidence to support its view that selling Stansted as well as Gatwick will increase competition,” Colin Matthews, chief executive of BAA, said in a statement.
“The Commission has not provided any substantial evidence to support its view that Edinburgh and Glasgow would compete under separate ownership and we believe there is no justification for specifying which of these airports should be sold,” he added.
The BAA is owned by an affiliate of Spanish construction and infrastructure firm Grupo Ferrovial, which paid £10.3 billion (€11.5 billion; $15.8 billion) for the airport operator in 2006. Including Gatwick, BAA owns seven airports in the UK and has a 65 percent stake in Naples Airport in Italy.