BAA finally runs out of runway at Stansted

The Court of Appeal today (26 July 2012) dismissed BAA’s latest legal challenge to the 2009 Competition Commission ruling that the airport operator must sell Stansted Airport.

This is BAA’s fifth legal challenge in its long-running battle to retain ownership of Stansted and it now finally appears that BAA has exhausted all its legal options and has no choice but to invite bids for its Essex airport with a likely price tag of around £1.2 billion.

Potential buyers include a range of global infrastructure funds as well as Manchester Airports Group (MAG) which currently owns airports at Bournemouth, East Midlands, Humberside and, of course, Manchester and, reportedly, has long been keen to acquire an airport in the South East.

SSE Chairman Peter Sanders commented: “We hope that with a new owner there will be an opportunity for constructive dialogue based on maximising the local benefits of the airport and minimising its adverse impacts.”

BAA’s main complaint at the start of this long-running legal battle was that it was being forced to sell Stansted at the worst possible time in terms of the economic downturn. Ironically, it seems now that it would have been far better for BAA to have promptly sold Stansted in 2009 since the airport now handles 15 per cent fewer passengers compared to three years ago.

NOTES

• Today’s Court of Appeal judgment was handed down by Lord Justice Mummery, Lord Justice Rimer and Lord Justice Sullivan following the Appeal Hearing on Monday 23 July. It was an expedited ‘read out’ judgment and in due course will be written up and posted on www.bailii.org/ew/cases/EWCA/Civ under BAA v Competition Commission.
• This long-running saga began in June 2006 with the launch of a study by the Office of Fair Trading (OFT) into BAA’s dominance of the UK airports market. In March 2007 the OFT concluded that competition was being distorted by BAA’s market dominance and referred the case to the Competition Commission for more extensive investigation. The Competition Commission took two years to complete its investigation and it concluded, in March 2009, that BAA should be forced to sell Gatwick, Stansted and one of its Scottish airports. BAA has since sold Gatwick and Edinburgh airports but has continued to resist the forced sale of Stansted. The legal battle has lasted more than three years. For further background see www.competition-commission.org.uk/our-work/baa-airports
• Following the sale of Stansted, BAA will still own Heathrow, Southampton, Glasgow and Aberdeen airports, giving it a 37 per cent share of the UK airports market.