East Anglia: BAA ends battle against order to sell Stansted Airport

STANSTED owner BAA today abandoned its long-running fight against a ruling by competition chiefs that it must sell the Essex airport.

In a brief statement, BAA said: “Having carefully considered the Court of Appeal’s recent ruling, BAA has decided not to appeal to the Supreme Court and is now proceeding with the sale of Stansted Airport.”

However, it added: “We still believe that the Competition Commission ruling fails to recognise that Stansted and Heathrow serve different markets.”

The Competition Commission (CC) first ruled in 2009 that BAA should sell Stansted. Although attempts by BAA to challenge the decision were unsuccessful, the commission later agreed to review its decision in view of the changing economic climate.

But in July last year, the CC ruled that there had been no material changes in circumstances that required it to reverse its decision.

A fresh challenge by BAA was heard last December by the Competition Appeal Tribunal, which in February this year upheld the original decision, and last month three Court of Appeal judges turned down a new bid BAA to overturn the decision in the courts.

BAA indicated last month that it planned a further appeal to the Supreme Court but has now decided to drop any further action and to go ahead with the sale.

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The origins of the saga to back to 2007 when the Office of Fair Trading referred BAA’s airport services to the CC.

BAA has already sold both Gatwick and Edinburgh airports as a result of the subsequent CC ruling, with both being acquired by Global Infrastructure Partnerships, and the sale of Stansted will leave the group with just four airports – Heathrow, Southampton, Glasgow and Aberdeen.

Stansted, which recently handled many of the additional VIP and head of state flights for the London 2012 Olympic Games, London’s third busiest airport and the UK’s fourth busiest overall.

It is currently a base for 16 airlines serving more than 150 destinations in 32 countries, with an emphasis on low-cost operators. It currently handling around 17.5million passengers a year, and has also handled more than 205,000 tonnes of cargo in the past year.

Around 10,200 people work at Stansted, including 1,400 BAA employees, and the airport recorded a profit of �86.6million last year.

Essex Chamber of Commerce express disappointment at the outcome and said it was important for the county’s economy that the right buyer was now found.

David Burch, the chamber’s director of policy, said: “We are disappointed that BAA have been instructed to sell Stansted.

“The airport is extremely important to the economy of not just Essex but the whole of the UK, as was seen during the recent Olympic Games, and is also a major source of direct and indirect employment.

“We have worked closely with BAA in the past and look forward to working with whoever takes it over to help build on its considerable successes to date. It is important that the right buyer is found to do that and we wait with interest to see who comes forward.”

However, Brian Ross, economics adviser to protest group Stop Stansted Expansion (SSE), welcomed BAA’s decision.

“We are pleased with this outcome,” he said. “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 �1.2billion.

The CC welcomed BAA’s 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.”