OFT airport study threat to BAA

Tina Milton

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A report by the Office of Fair Trading could prompt a restructure of the UK airports market

The Office of Fair Trading (OFT) has confirmed it will launch a study into the UK airports market to establish if "the structure works well for consumers". The report could recommend the break-up of BAA's airport network.

The OFT pointed out that nearly two-thirds of UK air passengers begin or end their journey at BAA airports. Within London this rises to nine out of 10 passengers and in Scotland over eight out of 10 air passengers fly from a BAA airport.

BAA, which has agreed to a £10.3bn ($19.5bn) takeover bid from Spanish firm Ferrovial, operates Heathrow, Gatwick, Stansted, Southampton, Aberdeen, Glasgow and Edinburgh airports.

The OFT said it has not yet decided if it should refer the case to the Competition Commission for an more in-depth investigation.

OFT chief executive John Fingleton said: "Greater competition between airlines over the past decade has led to wider choice for air travellers and lower fares. We now think it is time to explore the potential for greater competition within the airport industry as this could ultimately yield significant benefits in terms of timely and adequate investment in UK airports, a better value service to the UK travelling public as well as potentially relieving the industry - and ultimately its customers - of the costs of regulation that may be disproportionate." The association warned it was considering the investigation in May.