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The Government will review the economic regulation of the UK airports system, under the Civil Aviation Authority, after the Competition Commission published a damning report into BAA, the owner of Heathrow's disastrous Terminal 5, criticising its poor customer service.
Ruth Kelly, the Transport Secretary, said today that the Government “recognises the points made by the Competition Commission in their interim report ... about the potential shortcomings of the current regulatory system”.
BAA, the owner of seven UK airports, including Heathrow, Gatwick and Stansted, was heavily criticised by the Competition Commission, which found that it "may not be serving well the interests of either airlines or passengers".
Most recently, BAA, alongside British Airways, has overseen a horrendous start to service at Terminal 5, which cost £4.3 billion to build, only to lose thousands of customers' bags and delay hundreds of flights.
As a result of poor service, BAA could be forced to sell one of its airports.
The operator has also drawn fire from the airlines that use its terminals who have made strong objections to the new pricing regime at the London airports, with some threatening court action and withholding payments.
Ms Kelly recognised that there was an “urgent need” to update the powers of the Civil Aviation Authority, the regulator governing UK airports, which were set more than 20 years ago.
“I welcome the Competition Commission's views, amongst others, that the current system needs to be reviewed to ensure it is effective for the 21st century,” she said.
But she added that no changes would be made to the basis on which current price caps at Heathrow and Gatwick airports were set.
The Competition Commission said that it looked forward to receiving the Government’s submissions, but emphasised that it alone would decide whether BAA should sell its airports.
Earlier today, the commission published its damning report into BAA, which said: "We are particularly concerned by its apparent lack of responsiveness to the differing needs of airline customers, and hence passengers, and the consequences for the levels, quality, scope, location and timing of investment and levels of quality of service."
On delivering the report, Christopher Clarke, the chairman of the Competition Commission's BAA Airports Inquiry, insisted that no conclusions had been reached ahead of publication of the inquiry's provisional findings in August.
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The sooner the better.
Farrukh, Woking, UK
Travel through Munich or Amsterdam to realise just how dreadful Heathrow is! Doesn't London deserve and need a workable airport with enough runways and is not located in the middle of residential areas?
Time to bite the bullet and start building in the Thames estuary.
Frank, Mack, Brussels
That's what happens when you let private equity take over important public assets.
Thomas Ralph, Dublin 4, Ireland
Chaos at T5 was solely on British Airways (BA, not BAA) who did not plan properly the resources nor the training required.
Completely separate issue is the CA note: the regulations have to be changed. Fine, it is up to them. Regulations are not made by BAA. Transport Aut and CA should work together
Maria, Brussels,
I fly from Norwich International Airport to Amsterdam and thence by KLM to anywhere in the world. No jams, no chaos, no Heathrow hotels, no rip-off parking. The Amsterdam transfer is a delight and arriving from a long trip at a little airport like Norwich is great. There is an alternative!
John, Norfolk,
I see, the lack of organization, responsiveness, and investment for the last 30 years is the fault of the new Spanish owners (1.5 years) . That is the kind blindness that has led to the current situation. Go ahead, and UK will stand still while France and Germany increase the advantage!
Maria, Brussels,
when airports like stansted and gatwick only allow 1 taxi firm to pick up passengers and then passengers suffer and wait very long periods for a taxi when there is little or no wait at other airports,why do the poeple who run these airports only allow 1 firm to have all the work?
nigel , bexley, uk
BAA has been run to maximise short term shareholder value for years, long before the Ferrovial T/O. Any businessman passing through any London airport will have noticed this.
Why delay? The sooner they are made to dispose of 2 of the London airports the better. Better for passengers, tourists to the UK, Airlines, and all stakeholders except the shareholders. And shareholders don't count as they have supported and benefited from the strategy for years, so now they should bear the pain.
Ferrovial will make a huge loss but serves them right for overpaying for an asset tarted up to look good in the shop window.
Rob, Sudbury, Suffolk, England
What does this say about the effectiveness of the airport regulator - the CAA? Presumably money well spent over all these years. Not.
Simon Booker, Surrey, UK
Not to mention what the airlines themselves think of BAA, their fees, inefficiencies, etc. Ferrovial have always been and remain undercapitalized in this acquisition - to the extent that questions should now be asked about the original "award" of this privatization.
Mike L, Chippenham, Wilts.
The sooner this disgraceful organisation is split up the better.
John, Edinburgh,
So BAA are rank rotten. This has been the case for years. Not only Gatwick should be sold but also Glasgow - or better Edinburgh, which is slowly but surely becoming the Heathrow of Scotland. So what's changed? Ah well, you see, it's owned by foreigners now...
Gerry, Glasgow,
There needs to be competition. BAA as the sole provider can basically call the shots and the customer suffers - as we've seen with the T5 fiasco.
Hamad Lone, London, England
Everyone has known since long before the Roman's monopolised the slave markets in BC time that monopolies only lead to higher prices, false economies, incompetence and total lack of service. I know of people who will not fly into the UK anymore but prefer to enter via other methods because the airports are so bad. How much did it cost the Competition Commission to come to this momentous decision that BAA's managenment of the airports was uselessly bad? Everyone else knew already.
Len, Western Australia,
I thought BAA's aim was to make as much money as was humanly possible by gouging passengers from the moment they leave their car on a shoddy piece of broken tarmac to when they have to throw away all their drinks in order to buy new ones the other side of security, to when they get charged £6 for some tiny plastic earplugs, to when...
They take a commission from the foreign exchange, from all shops, and they charge ludicrously high prices for parking. Security is slow and cumbersome and even tiny plastic bags to put makeup in are charged at £1 at Stansted.
As a passenger you are fleeced by BAA from start to finish, so it is obvious the airlines will be coming in for the same BAA scamming treatment, just adding half a dozen zeroes to the end of each number.
iain carstairs, bedford, uk
Very clever yet again...
run a good viable business down
instruct managers to operate badly
demoralise the workforce
strip out the good bits
breakup and dispose
What next...
j o'bacon, elmstead, uk