Azara Blog: Competition Commission produces vacuous report on BAA

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Date published: 2008/04/22

The BBC says:

The government will review the economic regulation of the UK's airport system after a report said that operator BAA may be failing airlines and consumers.

Transport Secretary Ruth Kelly said the review would look at how to improve customer service, boost investment and deal with environmental concerns.

Earlier the Competition Commission said BAA dominated airports in south-east England and parts of Scotland.

BAA's seven airports include Heathrow, Gatwick, Stansted and Edinburgh.

The company, which is owned by Spain's Ferrovial, also controls airports at Glasgow, Southampton and Aberdeen.
The Competition Commission said that the point of giving BAA ownership of Heathrow, Gatwick and Stansted after privatisation in 1987 was to make sure there would be adequate airport capacity in the south-east of England, but that there was still a shortage of capacity.

The regulator conceded that competition in the south-east of England was unlikely in the short term because of the lack of capacity, but suggested that having airports separately owned could help to encourage growth in capacity.

What planet does the Competition Commission live on? The lack of capacity is not down to BAA, which has been vigorously campaigning for more capacity at Heathrow, Gatwick and Stansted for years, mostly to no avail. The lack of capacity is down to the academic middle class people who run Britain, who refuse to allow enough runways to be built.

The Competition Commission is of course one organisation that is allowed to operate without competition, hence its ability to produce such stunningly silly reports. BAA should have its monopoly broken up because it is a monopoly in a situation where there is no benefit from having a monopoly, not because there is a shortage of capacity.

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