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A terminal decline for airport owner?



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Published Date: 23 April 2008
WITHIN weeks, UK airports will be groaning under the weight of the sun-seeking masses making their summer getaways. In the glass-magnified heat of the terminal buildings, bodies will be crammed together in security queues as children wail, teenagers bemoan the lack of shops and errant pushchairs batter legs.
Those queuing will offer up curses on the airport owners – which, in the majority of cases, will be BAA.

But perhaps they should pay heed to the old adage – be careful what you wish for.

Yesterday, the Competition Commission issued its int
erim report on the airport giant – which has Edinburgh, Glasgow, Aberdeen, Heathrow and Gatwick in its stall – and indicated that its monopoly may not be operating for the greater good.

The commission will come back in August with a list of measures it requires to be taken, which may include the sale of some of BAA's concerns.

It says the common ownership "may not be serving well the interests of either airlines or passengers" – but analysts, airlines and consumer groups who spoke to The Scotsman are split over whether it is better to fly with the devil you know.

Leading Scottish business organisations believe it is, feeling that BAA has a proven record of investment. They are worried that if the airports were opened up, they would become a fighting arena for providers, with services suffering the collateral damage.

The deputy chief executive of Edinburgh Chamber of Commerce, Graham Birse, said BAA's stewardship had brought "continual investment in the facilities, and investments in services".

He said aside from structural improvements, such as the expansion of terminals, BAA had kept its airports running smoothly in the face of the increased threat of terrorism. He compared this to other airports in Europe which had become "gummed up" by increased security measures.

He said: "You can get through the security barriers in Edinburgh in five minutes, but people are fighting in other places to get on board."

He said the commission had failed to understand the different markets served by the three Scottish airports, which would not be affected by increased competition. And he accused it of failing to appreciate the geography north of the Border.

He said:

"At the end of the day, if you want that level of investment that BAA are putting in Edinburgh, the airport has to be a profitable concern and putting it in a risky position isn't going to deliver better services in the long run."

The Scottish Council for Development and Industry (SCDI) said the Competition Commission had yet to prove that new operators would deliver better services for Scotland.

Iain Duff, the organisation's chief economist, said travellers had benefited from a "huge growth in the number of destinations served by Scottish airports over the last few years" and major investment in facilities and security.

"BAA is committed to significant, future investment plans for the three main Scottish airports and we would need assurances that any change in ownership would not threaten this investment and the planned improvements to access and service," he said.

"New air routes are vital to our continued economic development and to meet our ambitious economic targets.

"One thing we can't allow is the uncertainty over the future ownership of our airports to undermine current investment in new facilities and the development of more routes in and out of Scotland, which is crucial to sectors such as tourism and financial services."

But the low-cost airlines, who are in the unenviable position of having to negotiate contracts with all-powerful BAA, are all for a break-up, and have lobbied heavily for one.

Peter Sherrard, of Ryanair, said: "

In a monopoly, there's no real onus on the airport to provide good services in terms of reducing security queues, making sure baggage belts work or delivering on time. They have monopoly control of the market – why should they bother?"

He said that in Europe, where competition was more effective, terminals were delivered on time and prices were falling as opposed to rising.

And he claimed that BAA was overly keen to spend money on its airports, with bills then passed on to travellers. "Consumers' interests are clearly not being served," he added.

"Breaking up the ownership would mean decreased costs in terms of charges, which would happen naturally."

Mike Rutter, Flybe's commercial officer, said the airline had been saying for years that the monopoly was "bad for the consumer".

And John Strickland, director of JLS Consulting, an independent air transport consultancy, said Scotland could see benefits through increased competition which would not be delivered in London.

The London airports are already operating at capacity, but there is major potential for growth at Aberdeen and, particularly, Glasgow.

Mr Strickland said: "Prestwick is flourishing because it's privately owned and focus on Glasgow might be gained (from a sell-off]. There's a point of view, as well, that Aberdeen perhaps does not have as much as it could. It doesn't have a large number of low-cost airlines. There has been more creativity at Inverness, which is owned by Hi-Al."

Whether or not it is a positive move for travellers, this may be BAA's last summer of free reign over the majority of Scotland's airports.

In coming years, it may no longer be BAA's name that they curse as they try to get some food in the empty hours between flights.





The full article contains 903 words and appears in The Scotsman newspaper.
Page 1 of 1

  • Last Updated: 22 April 2008 9:18 PM
  • Source: The Scotsman
  • Location: Edinburgh
  • Related Topics: Scotland's airports
 
1

Fanling,

Hong Kong 23/04/2008 00:42:03
"WITHIN weeks, UK airports will be groaning under the weight of the sun-seeking masses making their summer getaways. In the glass-magnified heat of the terminal buildings, bodies will be crammed together in security queues as children wail, teenagers bemoan the lack of shops and errant pushchairs batter legs."

Great schoolgirl essay stuff, your opener, Lindsay, but point taken. (Good grief, not just one but both of your names are my family names.)

But I agree that Aberdeen, Edinburgh and Glasgow should be relieved of the strangling yoke that is BAA. Competition needs to prevail if prices in those rip-off environments are to make a traveller's life a bit more bearable. At the present time BAA airports in Scotland, and worse in England, are frequently hell on earth.





2

Malc777,

Linlithgow 23/04/2008 06:57:56
It's pretty rich for Ryanair to accuse any other organisation of providing poor service. They'd rather an airport terminal was a corrugated iron shed with chemical loos.
3

eric,

Lothian 23/04/2008 07:16:53
BAA will keep its wee Golden egg at Edinburgh milk it as long as they can until independence,any of the other Airports will welcme the change.
4

paulr,

edinburgh 23/04/2008 08:14:32
At the end of the day, if you want that level of investment that BAA are putting in Edinburgh, the airport has to be a profitable concern
-------
I agree it should be profitable, but the profits should stay in Scotland and not go to some bunch of spanish cowboy builders "BAA".
5

scottish person,

paisley 23/04/2008 08:42:01
I would welcome a change of ownership for Glasgow Airport if they promised that every flight abroad did not have to pass through the toilet called heathrow. Full of non english speaking and not helpful workers.
6

The Strategist,

23/04/2008 09:23:12
All the Scottish airports should be owned by the Scottish Airports Authority.
7

Buttress,

23/04/2008 09:27:58
And the Chamber of Commerce - another rentagob quote, how much would its opinion stnd up to close scrutiny?

Er - who funds the Chamber of Commerce?
8

Buttress,

23/04/2008 09:30:15
BAA - owned by Spanish construction company Ferrovia.
9

Name,

23/04/2008 09:53:52
#6 What difference would that make?

#5 Loving the closet racist comments.

I personally couldn't care less if it's a "Skottish" or any other company whose hq was based outside of the UK. All I (and I'm sure most other people) care about is the services provided by the airport.
10

Buttress,

23/04/2008 09:57:49
The problem is with BAA, it is also involved in things like the expansion of Stansted, which is a speculative venture and one which will ruin a large swathe of England.
11

Buttress,

23/04/2008 10:04:29
'In further bad news for BAA – but news that will be very welcome to many local homeowners and landowners – the Competition Commission has announced that it is to investigate potential abuse by BAA of its compulsory purchase order (CPO) powers.

BAA's business success depends heavily on its being able to use CPO powers to acquire large tracts of land for airport development. Much of the land is then used for car parking, hotels, office building and other development ancillary to the operation of an airport – but highly profitable. BAA's CPO powers are limited in law to land which is essential for "core" airport operations and it is difficult to see how hotels, office blocks and car parks would fit that definition.

In the past BAA has used the threat of CPO (but not actually a legally authorised CPO) to acquire land at agricultural values which then becomes the site for a hotel, office block or car park. Land which has an agricultural value of £5,500 an acre could have a commercial value in excess of £1 million an acre.

The potential financial implications for BAA are therefore extremely serious whilst local home-owners and landowners could stand to make substantial gains if BAA has been found to be abusing its CPO powers.

In March 2006, SSE provided a confidential submission to the CAA questioning BAA's CPO powers and made this information available to the Office of Fair Trading and the Competition Commission as part of the current investigation into the BAA monopoly. A joint complaint has also been made to the Competition Commission by two property developers [see notes below] who own a large area of land in the vicinity of Stansted Airport.'

SSE particularly welcomes this initiative by the Competition Commission at a time when local homeowners and landowners are already being approached by representatives of BAA to sell out now or face the 'inevitability of a CPO at a reduced price in a few years time'. SSE has received numerous reports fr
12

Buttress,

23/04/2008 10:06:09


SSE has received numerous reports from local homeowners and landowners telling us that BAA's approach has verged on intimidation.

SSE economics adviser, Brian Ross, commented: "BAA is a cash strapped company and many people have been wondering why it is rushing around trying to acquire property now under the threat of a CPO. We all now know the answer. The airport operator's CPO powers are far less wide-ranging than they would like us to believe and BAA may have anticipated that its CPO bluff could soon be blown apart." '









www.stopstanstedexpansion.com
13

Alternative (High Octane) Fuel Head,

Edinburgh 23/04/2008 11:39:32
Flying anywhere on holiday is my idea of hell.

Far better to do the following:-

1. Service the car
2. Pack the car at your leisure
3. Drive to Rosyth
4. Enjoy a beer and a chat with other travellers whilst waiting in the vehicle holding area for the ferry.
5. Drive onto the ferry
6. Take your night bag up to your comfortable, air-conditioned cabin.
7. Enjoy a good meal at the restaurant/carvery/canteen
8. Relax with a few drinks in the evening and watch the excellent entertainment
9. Go for a stroll on deck and watch the sun go down
10. Have a good, restful nights sleep
11. In the morning, go to your car and drive off the ferry
12. Make your way down to the Cote d'Azur taking whichever route you feel like, which could include the wonderful experience of driving along roads and avenues next to French vinyards. Stop whenever you feel like it for refreshments, and possibly overnight as well.
13. Arrive at the Cote d'Azur and relax by the pool or on the golden sandy beach at Juan les Pins
14. Take a drive along the coast to Monaco, via the quaint fishing villages and yacht havens of Villefranche sur Mer, Nice and Cap d'Ail
15. Take a drive around the Grand Prix circuit (except Casino Square). Take in the atmosphere of the Harbours d'Hercule and Fontvielle
16. When the time comes to return home, take a different route and see even more of the French contryside.
17. Get back on the ferry and return home at your leisure.

Something like the above is a PROPER holiday. Maybe I should have been a travel agent?
14

TimW1234,

Ottawa, Canada 23/04/2008 13:37:00
Yet MORE babbling from Fanling in Hong Kong!

PLEASE! PLEASE! PLEASE! Cease and desist, Fanling.
15

WKKB,

23/04/2008 15:18:25
what ever we all do... stay away from T5 HAHAHA
16

,

23/04/2008 17:39:23
Comment Removed By Administrator
Reason:
17

The Ghost of Sir William Arrol,

The Forthy Bridge 23/04/2008 18:57:42
I wouldn't pay much for any airport these days. With oil prices set to double and quadrupple over the coming few years, thanks to declining supplies after peak oil, there will be fewer and fewer people able to afford to fly. It is estimated that in as little as 20 years time there will be only one surviving airport in the UK and it will not be Edinburgh! Anyone who has looked at the oil supply data will concur because the pace of change forced by energy supply shrinkage is going to be truly shocking. Only the delusional will believe otherwise.
18

Fanling,

Hong Kong 23/04/2008 20:31:23
#14 TimW1234,Ottawa, Canada

"Yet MORE babbling from Fanling in Hong Kong!
PLEASE! PLEASE! PLEASE! Cease and desist, Fanling."

Babbling? Where, Mr Exclamation-Mark with trademark added-value CAPITALS? Are you totally incapable of reading beyond somebody's user-name? The fact that you have to persistently demonstrate what a stupid pr*ck you are is some quality indeed. Congratulations.


19

Fanling,

Hong Kong 23/04/2008 20:38:34
#13 Alternative (High Octane) Fuel Head,Edinburgh

Great idea, if only heading for continental Europe, or western Asia, at a push. I used to make similar journeys from Dover in my younger days on Honda motorbikes. I loved the Dover ferries then. Holiday always started there.

Getting to Hong Kong that way is bit more tricky though.
20

WL,

livingston 23/04/2008 21:17:23
Yes, there should be more competition. Edinburgh's Waverley station and Haymarket station should no longer be owned by the same company. Let's have more competition. See who wins. I am sure it is not the traveller.
21

Alternative (High Octane) Fuel Head,

Edinburgh 23/04/2008 23:29:59
#19:

Getting to Hong Kong? No problem. Get yourself on a merchant ship and work your ticket.

Of course it takes longer but then isn't that the whole point of traveling in the first place?
22

Fanling,

Hong Kong 23/04/2008 23:35:51
#21
Neat solution ... when time is not the essence. Working one's passage seems a bit drastic though.
23

,

24/04/2008 07:54:39
Comment Removed By Administrator
Reason:
24

Fanling,

Hong Kong 24/04/2008 16:19:07
#23
TimW1234,Ottawa, Canada

Listen well: I did not invite your unjustified, gratuitous attacks at #18 and #23 above. You just come wading in, mad dog style, as usual. Like anyone with a grain of common sense I avoid you because you and the concept of reason are clearly strangers.

On the evidence of your many inane posts on here, "intelligent conversation" and rational discourse are not your strong suit. And don't attempt to enlist the aid of imaginary "others" to bolster your foolishness. The only "others" that come to mind are carbon-copy shouting versions of yourself.

If you have some kind of compulsive mental illness that causes you to issue outbursts against people who have done nothing to you, then I sympathise. If not, then you are truly a sorry case.
25

Fanling,

Hong Kong 25/04/2008 00:48:17
... attacks at #14 (not #18). Miscue.

 

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