BAA rejects calls for split

Emily Pacey

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Airlines call on the Office of Fair Trading to enforce separate ownership of BAA's London airports

UK airports group BAA has rejected calls from airlines to break up its airports. BA and Ryanair have urged the Office of Fair Trading (OFT) to consider forcing BAA to split the ownership of its three London airports.

Reports indicate that BAA chief executive told the BBC "a more fragmented structure" would undermine future investment. He also said, "I believe we have a very strong record of running the airports going into this review. This is a debate of national importance, about capacity over 25 years. If the OFT does what the airlines are asking there will be less investment in airports, and gridlock."

In June the OFT announced the launch of a study into the UK airports market to establish whether "the structure works well for consumers". Following the study, the case may be referred to the Competition Commission.

BA called on the Competition Commission to examine the possibility of separate ownership of Heathrow and Stansted airports, both of which are set to expand. The completion of Heathrow terminal 5 is scheduled for 2008, and the second runway at Stansted by 2013.

Earlier this year, BAA was bought by a Spanish consortium led by construction firm Ferrovial for £10.3bn ($19.5bn).