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The Times has learnt that Sir Richard Branson’s airline will make the request as part of its submission to the Office of Fair Trading’s airport markets study. Ryanair, which will make public its submission to the OFT today, is also expected to endorse steps towards a break-up of BAA.
Virgin is likely to stop short of calling for a full break-up of the airports operator but is expected to say that the airports market is so complicated that it demands a thorough investigation.
Analysts expect that the airlines will use last week’s disarray at airports to support their case for a break-up of BAA. One industry insider said: “It has been interesting that the three regulated London airports struggled the most. Luton was back to normal much more quickly than Stansted. It reinforces the question of why we need the group at all.”
Other industry sources said that there was already plenty of evidence, before the events of the past week, to support a break-up of BAA.
The Office of Fair Trading began its study into the airports market, which has a turnover of at least £2.6 billion, in June, pointing out that nearly two thirds of UK air passengers start or end their journeys at a BAA airport. Within the London area that figure rises to nine out of ten passengers.
EasyJet is also expected to use its submission to call for a break-up. It has said previously that an inquiry was “long overdue — there are too many cases where the ownership or regulatory structures act against consumers”.
Of the major UK airlines only British Airways has not expressed a preference for the break-up of the airports group in the past, although it did welcome the announcement of the OFT’s market study in June. The UK flag carrier is taking advantage of a late extension to the OFT’s deadline and is still working on its submission.
The airlines object to BAA because they argue that it is a multi-tier monopoly: it is a monopoly operator and owner in its airports; it controls seven airports across the country; and it controls the shops that go into its airports.
“This means they can control passenger flows in their interest rather than in the interest of the passenger or the airline, their customer,” an industry insider said.
Industry observers have pointed out that the chief executives of the Office of Fair Trading, British Airways and Ryanair are all veteran monopoly-breakers.
When John Fingleton, the OFT’s chief executive, was the Irish regulator, and Willie Walsh, the chief executive of BA, was at Aer Lingus, they and Michael O’Leary, Ryanair’s outspoken chief executive, succeeded in breaking up the Irish airports monopoly.
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