Gatwick and Stansted go up for sale

Gatwick and Stansted airports were effectively put up for sale today after competition chiefs signalled an end to BAA's monopoly.

The airport operator was told that the lack of competition was "against the public interest" and was having "adverse consequences for passengers and airlines".

The Competition Commission said BAA should sell off two of its three London airports. This means that the Spanish-owned company will be required to sell Gatwick and Stansted if it wants

to retain control of its flagship airport Heathrow. BAA has been heavily criticised over delays and poor service, particularly at Heathrow which was branded "not fit for purpose".

The commission has the power to order the sale of airports. A final decision on the company's future will be taken next April.

BAA described today's findings as "flawed" and "disproportionate" and warned that the "fundamental restructure" they called for could lead to slower airport expansion and a worse service for passengers.

But Christopher Clarke, the chairman of the Competition Commission's BAA inquiry group, insisted that the break-up of BAA was in the best interests of the public.

"We have provisionally found that there are significant competition problems arising from BAA's common ownership of seven UK airports - Heathrow, Gatwick, Stansted, Southampton, Edinburgh, Glasgow and Aberdeen," he said.

"This is evident from a large number of factors including its lack of responsiveness to the needs of its airline customers and a lack of initiative in planning capacity. This has resulted in investment that is not tailored to the requirements of airport users and lowers levels and quality of service for both airlines and passengers. "The Competition Commission has also published its proposed remedies. If these are implemented, the commission will order BAA to sell two of its three London airports and also Edinburgh or Glasgow airport."

Mr Clarke said that the commission had also been struck "by the differences in approach to both airline customers and development between BAA and owners and operators of regional airports" with better treatment for passengers using airports other than Heathrow, Gatwick or Stansted.

The report also accuses BAA of contributing to a "serious shortage of capacity, particularly runway capacity, in the South-East" because of its focus on expanding Heathrow and argues that new airport owners would be "more active than BAA in exploiting existing opportunities" to increase flight numbers.

That is likely to be seized by some anti-expansion campaigners as evidence that further runways around London are not needed, although the Competition Commission rejects this and indicates that it believes that extra runway space is essential.

Today's report also calls for a review of the Government's 2003 Air Transport White Paper - which set out plans for a third runway at Heathrow.