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BAA sell-off could help Kent airports take off

Kent airports could enjoy a boost after competition watchdogs confirmed that BAA must sell Gatwick and two other airports.

In its widely-trailed final report on airport ownership published today, (19) the Competition Commission ordered BAA to dispose of Gatwick, Stansted and Edinburgh or Glasgow within two years.

Breaking up BAA’s near-monopoly of the south east’s main airports may boost regional terminals such as Kent International at Manston, and Lydd.

Matt Clarke, chief executive of Kent International, said: "This announcement is not surprising and is in line with the preliminary findings released last year.

"If the effect of the breakup works to stimulate competition in the South East as indicated by the Commission this can only be a good thing for passengers and the aviation industry in general. Competition in the South East will pave the way for deregulated pricing creating opportunities for airports with available capacity like Kent International."

Gatwick, which could have a second runway after 2019, will be the first to go under the hammer, and the sale process has already begun. A number of bidders have expressed interest in the airport on Kent’s doorstep and the sale is likely to complete by the summer, with an estimated price tag of £2 billion.

Stansted will be the next to go. BAA, which is owned by Spanish company Ferrovial, is being allowed to keep Heathrow but the commission warns that even after the sale of Gatwick and Stansted, it will continue to have substantial market power.

Lydd Airport managing director Cliff Spink welcomed the Competition Commission’s ruling that forces BAA to sell Gatwick, Stansted and a Scottish airport..

"I agree with the decision," he said. "I think it’s going to be good for business and good for passengers."

Regional airports like Lydd and Manston took the heat off hotspots like Heathrow and Gatwick. "We believe the regionals give better efficiency. It’s a proven fact that passengers get a better deal at regionals and taking away some of the pressure on these hotspots will be to the passengers’ benefit."

BAA had not given the service that the UK’s international airports deserved. "They should have been working on these problems many years ago and many of us in the industry believe this is the correct decision."

As for selling Gatwick in a recession, Mr Spink said recession just the right time to do it because it was a time of change. He welcomed new owners at Gatwick and getting some new fresh minds in the aviation industry.

Christopher Clarke, who chaired the BAA Airports inquiry, said the only way to address what it called the detriment to passengers and airlines from the "complete absence of competition" between BAA’s south-east airports was to order their sale.

"We recognise that in using our powers in this way, we will have a significant impact on BAA’s business. However, given the nature and scale of the competition problems we have found, we do not consider the alternative measures, such as the sale of only one of the London airports or greater regulation, will suffice."

BAA recently revealed that 34.2 million passengers used Gatwick in 2008, 2.8 per cent down on the previous year.

Total revenue was up 14.5 per cent to £2.125bn, it made a £1.95bn net loss.

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