Gatwick Airport for Sale in Early November Due to Competition Concerns
Gatwick Airport, located in London, will be up for sale in less than a month due to competition concerns raised several months ago in a preliminary investigation by the Competition Commission.
In March 2007, the UK’s Office of Fair Trading made a reference to the Competition Commission regarding the supply of airport services in the UK. In August 2008, the UK’s Competition Commission issued a report finding competition problems existed with each of the seven airports in the UK owned by British Airport Authority (BAA), a subsidiary of Spain’s Ferrovial. These competition problems caused adverse consequences for passengers and airlines.
The Commission noted that these problems became evident in several ways, including BAA’s lack of responsiveness to customer needs and a lack of initiative in planning. The Commission found that the lack of airline capacity, and in particular runway space, is a direct result of a lack of competition, although it admitted that government policies and planning regimes also played a role. In addition, the Commission observed that when compared to regional airlines, BAA is slow to develop new routes, lower prices and respond to consumers’ needs.
In its report, the Commission announced that BAA should sell two of its three London airports (Gatwick, Heathrow and Stansted) and one of its two Scottish airports (Edinburgh and Glasgow). The Commission was seeking advice on which three airports should be sold and will release its final report in the first quarter of 2009. The Commission noted that because of its own guidelines, Heathrow was not likely to be recommended for sale, unless the sale of Gatwick or Stansted was impractical or ineffective. The report also recommended changes to the regulatory system that governs the airports.
In response to the report, BAA announced that although it disagreed with the report’s conclusions, it was putting Gatwick up for sale in November. Gatwick is London’s second-largest airport, the world’s busiest single-runway airport and served 35 million customers in 2007. BAA hoped to hold on to Stansted, as well as Heathrow. BAA will send an information memorandum to interested buyers in the first half of November. BAA hopes to sell Gatwick for around £ 3 billion.
Anonymous sources say that Citigroup and the Vancouver Airport Authority are planning a joint £ 2 billion pound bid for Gatwick. Many potential buyers have already expressed an interest, including Virgin Atlantic airlines, Goldman Sachs and Deutsche Bank. Five or six consortiums are expected to emerge soon to bid on the airport. Sources close to BAA said the selling process would take at least a year.
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust lawsuits. Eu competition law interests Jason particularly. He resides in Seattle, Washington.
In March 2007, the UK’s Office of Fair Trading made a reference to the Competition Commission regarding the supply of airport services in the UK. In August 2008, the UK’s Competition Commission issued a report finding competition problems existed with each of the seven airports in the UK owned by British Airport Authority (BAA), a subsidiary of Spain’s Ferrovial. These competition problems caused adverse consequences for passengers and airlines.
The Commission noted that these problems became evident in several ways, including BAA’s lack of responsiveness to customer needs and a lack of initiative in planning. The Commission found that the lack of airline capacity, and in particular runway space, is a direct result of a lack of competition, although it admitted that government policies and planning regimes also played a role. In addition, the Commission observed that when compared to regional airlines, BAA is slow to develop new routes, lower prices and respond to consumers’ needs.
In its report, the Commission announced that BAA should sell two of its three London airports (Gatwick, Heathrow and Stansted) and one of its two Scottish airports (Edinburgh and Glasgow). The Commission was seeking advice on which three airports should be sold and will release its final report in the first quarter of 2009. The Commission noted that because of its own guidelines, Heathrow was not likely to be recommended for sale, unless the sale of Gatwick or Stansted was impractical or ineffective. The report also recommended changes to the regulatory system that governs the airports.
In response to the report, BAA announced that although it disagreed with the report’s conclusions, it was putting Gatwick up for sale in November. Gatwick is London’s second-largest airport, the world’s busiest single-runway airport and served 35 million customers in 2007. BAA hoped to hold on to Stansted, as well as Heathrow. BAA will send an information memorandum to interested buyers in the first half of November. BAA hopes to sell Gatwick for around £ 3 billion.
Anonymous sources say that Citigroup and the Vancouver Airport Authority are planning a joint £ 2 billion pound bid for Gatwick. Many potential buyers have already expressed an interest, including Virgin Atlantic airlines, Goldman Sachs and Deutsche Bank. Five or six consortiums are expected to emerge soon to bid on the airport. Sources close to BAA said the selling process would take at least a year.
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust lawsuits. Eu competition law interests Jason particularly. He resides in Seattle, Washington.
Labels: airport, eu competition law, eu law, european antitrust lawsuits, Gatwick
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