Break-up turmoil as BAA wins bias ruling
By Hannah Kuchler
The Financial Times
Published: December 21 2009 12:01 | Last updated: December 21 2009 18:23
BAA has won its appeal against the Competition Commission but it is not yet clear whether the judgment means the company will have to sell airports in London and Scotland.
In March, the airport operator was ordered to sell three of its seven UK airports: Gatwick, Stansted and one of either Glasgow or Edinburgh.
But BAA, owned by Spanish infrastructure group Ferrovial, accused the Competition Commission of an “intolerable conflict of interest” because one member of the panel had links to a potential buyer.
The company also argued that a decline in passenger numbers should have been considered in the decision.
Its lawyer, Nicholas Green QC, told the appeal tribunal that there was a “powerful connection” between Manchester Airports Group, one potential Gatwick buyer and Peter Moizer, a member of the inquiry. But Mr Green qualified this, saying it was a matter of “apparent bias” not “actual bias”.
Prof Moizer has been a long-standing strategic adviser to the Greater Manchester Pension Fund, which joined a consortium bidding for Gatwick that included MAG and Borealis, the Canadian infrastructure fund.
He resigned just before the commission’s final report in March when it became clear the pension fund was involved in the Gatwick bid.
The tribunal unanimously concluded on Monday that there was “a real possibility of bias” because of the participation of Prof Moizer. But they threw out the suggestion that the Commission had failed to take account of relevant considerations when deciding on the timescale for the divestments.
BAA said it would now hold discussions with the Competition Commission, “to determine the appropriate response to this judgment’’.
The company has already sold Gatwick for £1.5bn to the owners of London City airport in October.
The Competition Commission said: “We’re studying the judgment and its implications carefully.”
Opponents of BAA’s position of dominance over UK airports expressed disappointment . Norman Baker, Liberal Democrat transport spokesman, said it was bad news for passengers: “They are the ones who suffer when one company has a stranglehold over the UK’s airports. It is not right for one company to run more than one airport in London and both Glasgow and Edinburgh airports.’’
Bob Atkinson, of travelsupermarket.com, said: “Regardless of the reasons behind today’s announcement, it remains a fact that BAA has a stranglehold on Scottish aviation, as well as a dominant position in south-east England. It’s not great news for passengers, especially from a customer service point of view.’’
By Hannah Kuchler
The Financial Times
Published: December 21 2009 12:01 | Last updated: December 21 2009 18:23
BAA has won its appeal against the Competition Commission but it is not yet clear whether the judgment means the company will have to sell airports in London and Scotland.
In March, the airport operator was ordered to sell three of its seven UK airports: Gatwick, Stansted and one of either Glasgow or Edinburgh.
But BAA, owned by Spanish infrastructure group Ferrovial, accused the Competition Commission of an “intolerable conflict of interest” because one member of the panel had links to a potential buyer.
The company also argued that a decline in passenger numbers should have been considered in the decision.
Its lawyer, Nicholas Green QC, told the appeal tribunal that there was a “powerful connection” between Manchester Airports Group, one potential Gatwick buyer and Peter Moizer, a member of the inquiry. But Mr Green qualified this, saying it was a matter of “apparent bias” not “actual bias”.
Prof Moizer has been a long-standing strategic adviser to the Greater Manchester Pension Fund, which joined a consortium bidding for Gatwick that included MAG and Borealis, the Canadian infrastructure fund.
He resigned just before the commission’s final report in March when it became clear the pension fund was involved in the Gatwick bid.
The tribunal unanimously concluded on Monday that there was “a real possibility of bias” because of the participation of Prof Moizer. But they threw out the suggestion that the Commission had failed to take account of relevant considerations when deciding on the timescale for the divestments.
BAA said it would now hold discussions with the Competition Commission, “to determine the appropriate response to this judgment’’.
The company has already sold Gatwick for £1.5bn to the owners of London City airport in October.
The Competition Commission said: “We’re studying the judgment and its implications carefully.”
Opponents of BAA’s position of dominance over UK airports expressed disappointment . Norman Baker, Liberal Democrat transport spokesman, said it was bad news for passengers: “They are the ones who suffer when one company has a stranglehold over the UK’s airports. It is not right for one company to run more than one airport in London and both Glasgow and Edinburgh airports.’’
Bob Atkinson, of travelsupermarket.com, said: “Regardless of the reasons behind today’s announcement, it remains a fact that BAA has a stranglehold on Scottish aviation, as well as a dominant position in south-east England. It’s not great news for passengers, especially from a customer service point of view.’’