Call for probe into BAA 'rule-breaking'

TRANSPORT Secretary Alistair Darling has been urged to launch an immediate investigation into BAA's London airports monopoly in the escalating row over the group's plan to subsidise a £4bn expansion at Stansted airport with revenues from passengers at Heathrow and Gatwick.

BAA chief executive Mike Clasper this week revealed that the construction of a second runway and additional airport infrastructure to support it would be delayed for 'several years' from its planned 2012 deadline unless it is able to bring in funding from elsewhere and double landing charges at the Essex airport.

Airlines that use Stansted, such as Ryanair and easyJet, are up in arms at the prospect of raised charges, and non-users, such as Virgin Atlantic, are angered that they will have to pay for the airport through an effective levy at Heathrow and Gatwick. TBI, owner of London's fourth airport Luton, has now waded in to the row accusing BAA of a flagrant abuse of its monopoly position.

TBI chief executive Keith Brooks said: 'The proposals are outrageous. They contravene the existing Civil Aviation Authority regulations on cross-subsidy of London airports and, if allowed to go ahead, would represent the further exploitation of BAA's acknowledged monopoly position.'

Brooks, who is attempting to position Luton as a viable alternative to Stansted, is seeking urgent meetings with Darling and the CAA over what he sees as BAA's use of its financial clout to expand an empire granted to it at privatisation.

'The BAA proposal will increase the cost of flying by introducing restrictive practices which are against the spirit of a liberalised and commercial market place,' he said.

The row is putting Darling in a difficult position. His aviation White Paper last year envisaged a major expansion of London airport capacity over the next 30 years. The first step was seen as the building of a second runway at Stansted - despite already voluble concerns expressed by the local community - by 2012.

Any significant slippage in that timetable, as BAA's chief executive has warned, could put plans to manage soaring passenger numbers in London and the South East out of kilter.

The row is just the latest BAA-inspired dust-up. Airlines at Heathrow have previously been up in arms over increased landing charges being used to pay for the construction of Terminal 5 for the exclusive use of British Airways.

While the expansion of Stansted is likely to be expensive, BAA is not short of a few bob. Just this week it reported sky-high profits of £733m for last year, a soaring 36% increase.

More people than ever are using Heathrow, Gatwick and Stansted and, per passenger, they are spending more money than at any time since European Union duty-free was abolished at the end of the last decade.

BAA's revenues from its vast shopping malls were up more than 7% last year and the company is forecasting that they will increase further this year. While BAA is taking on debt to finance the spending of £4.2bn on Heathrow's Terminal 5, the company is still producing enough money to raise its dividend by 6% to 21.2p per share.