Grotty Gatwick - Part 2

Well, as the Celtic Sage has predicted the abysmal airport operator BAA is being forced to sell part of its privatised monopoly of the British airport industry. The Competition Commission has said it will require BAA to sell Gatwick, Stansted and Edinburgh airports. The decision is subject to a final consultation, with the final decision due in February or March. There are substantial reasons why the regulators, and more importantly, the travelling public are unhappy with BAA – a cash cow subsidiary of the troubled Spanish Brick manufacturer, Grupo Ferrovial which also owns Amey plc, a British contractor and major investor in Tube Lines, one of the London Underground infrastructure companies.

BAA has controlled Heathrow, Gatwick and Stansted airports for more than 40 years and has owned Edinburgh and Glasgow airports since the early 1970s. The Competition Commission is concerned about a lack of competition between airports in the south-east of England and central Scotland, and says BAA's common ownership of airports there is largely to blame. It believes this has contributed to a poor level of service to passengers and airlines as it reduces incentives for improvements.

BAA has already put Gatwick up for sale with an estimated price tag of £1.8bn (€1.94bn), but it had hoped that by doing so it would be able to keep Stansted, where Ryanair is the biggest customer. The two airports will have to be sold to different buyers under the Competition Commission's ruling, a move that will please Michael O'Leary.

Chairman of the enquiry into ownership of the airports, Christopher Clarke, said that under separate ownership, the new operators of Gatwick, Stansted and Edinburgh airports will have "much greater incentive to be far more responsive to their customers, both airlines and passengers". BAA handles 91pc of passengers in south-east England, where overcrowding and the chaotic opening of Terminal 5 at Heathrow led lawmakers and airlines to demand the company's break-up. The Competition Commission said it's also planning measures to require more investment at the London airports and will make recommendations on a new system of regulation.

BAA, it says, has been slow to develop new routes at some airports and has been sluggish in its approach to investing in new terminals and pushing for extra runways. It contrasts this with the performance of other airports, such as Manchester and London City, which it says have been more responsive to customers' needs and have managed to both expand and have lower charges.



Despite this summer's outcry about airport standards BAA airports are still continuing to treat travellers with such disdain. The airports have a 27-point list of performance standards they are supposed to uphold for airlines but BAA has had the audacity to ask for this set of standards to be put on hold for the opening of Terminal 5. With that lack of accountability passengers are going to be left completely in the lurch.

But now it turns out that, as I predicted in October, Gatwick is worth nothing like the figures quoted and BAA is touting the possibility of selling it with a go ahead for a second runway despite entering into a binding agreement with Sussex County Council not seek to construct a second runway for 40 years. As I said then;

“As for BAA thinking that Richard Branson will give them £1.8 Bn before they go bankrupt for the damaged goods called Gatwick, they must be deeply delusional. Branson won’t offer anything like that and will bring in somebody with him to share the risk, He will discount the income for he’ll have to rip out half the forgettable retail clutter to make the airport work well and ease the passenger’s journey to and from the plane (the PURPOSE of an airport; make a note BAA). However the chaos which is Gatwick shows why BAA does not understand the Airport business and why this smug privatised monopoly is lacking in the core skills to run ANY UK airport. The sooner Grupo Ferrovial and the Gang of Cash Cow Gringos it has bought in the UK with its junk bond status debt goes down the better for UK PLC. Their comes a stage when it is kinder for Old Beasts to be quietly and humanely put down to end their suffering and the upset of those who have to witness their sad and jerky movements.”

http://daithaic.blogspot.com/2008/10/grotty-gatwick.html

BAA, which is now trying to sell the airport in Sussex, has sent confidential documents to potential buyers including one headed "Gatwick builds a second runway”. The revelation is likely to reignite the debate over whether Stansted, Gatwick or Heathrow should be the first to have another runway.



The Competition Commission, which in effect pushed BAA into selling Gatwick, has said that the Government should not be too restrictive and should consider "the ambitions of the new owner of Gatwick airport, including the possibility of a second runway after 2019". BAA signed a deal with West Sussex County Council in 1979 promising not to construct another runway for four decades. However, at least one bidder - German firm Hochtief AirPort - is said to want to re-open negotiations to start work on a second runway before 2019.

A third runway at Heathrow, if given the go-ahead, is not expected to become operational before 2020 at the earliest. Developing Gatwick instead is likely to affect fewer residents and to have less of a pollution impact. Around 26,000 more residents would suffer aircraft noise above 54 decibels, according to experts, compared with 118,000 under the Heathrow expansion blueprint.

The package BAA is sending to bidders for Gatwick includes a map with a second runway around two thirds of a mile south of the existing one and just 400 metres from residential areas of Crawley. It also explains how Gatwick's capacity could be expanded from 45 million passengers a year to 80 million, compared with the 67 million who used Heathrow last year. Other organisations interested in buying Gatwick - the second largest in the country - include the Manchester Airports Group, the German airports firm Fraport, Vancouver Airports Authority and US pension funds.

The Competition Commission does not go far enough and BAA should be broken up in its entirety. It is a virtual monopoly created to fatten up the airports when Thatcher’s government sold them off and the taxpayers of Britain have been cheated on two counts – In the assets being sold at an undervalue as part of the great privatisation rip off and then in the subsequent years when airport users have paid a premium price for an inferior service as BAA turned the airports into tacky and unwanted shopping malls before flogging the lot at a ridiculous valuation to the Spanish Brick company. Now that the game is up they in their desperation are shown to have deliberately lied that approving terminal 5 at Heathrow would not lead to a demand for a third runway. Similarly the sell offs of Gatwick and Stanstead will only make sense for BAA if they build second runways at both airports.



Either credit crunched BAA should be taken back into the Public Sector so the airports can be run in the public interest or they should be sold off (with the increased value from extra runways going to the taxpayer) to people who have expertise and a feel for the business and who realise that the primary purpose of an airport is transport not a wonderful “shopping and dining” experience. Good riddance to bad rubbish I say, good riddance to BAA and its well paid army of oily lobbyists and slick PR wallahs!