Smashing up BAA – an improvement for passengers?

August 20, 2008

baa.jpgWhen the government established the British Airports Authority in 1965, its aim was to make airports more flexible and profitable. Profitable they may have been but flexibility is not something that Britain’s larger airports are renowned for.

The list of complaints about BAA is a long one, both from airlines and passengers. Airlines says the charges levied are excessive. Travellers say airport terminals are overcrowded, delays are all too frequent and increased bureaucracy has prevailed since the tightening of baggage restrictions in August 2006.

Some commentators say competition will do wonders for airports which might get run for the benefit of airlines and passengers rather than the operating company, which sometimes has been criticised as being more interested in making money from its airport shops than in giving travellers a speedy journey through its terminals.

“BAA is one of Britain’s most arrogant, complacent and customer-unfriendly businesses. It’s a showcase for the disbenefits of immunity from competition,” Jeff Randall writes in the Daily Telegraph. “BAA handles more than 90 percent of all airport traffic in the South East, yet treats those who pay its wages – airline passengers – as a nuisance. As long as it enjoys such monopoly power, we can look forward only to more of the same.”

But others argue that with BAA’s more than 40 years of experience and the company’s investment in the UK’s airports, a break-up could cause even more problems, and crucially, might not help sort out one of the key issues for transport policy – airport capacity. Heathrow, for example, is so close to bursting point that even small disruptions can lead to big delays.

Even British Airways, which has experienced its fair share of problems at BAA-owned airports, pointed out after the release of the Competition Comission’s report that the “ownership structure is secondary and that the focus should be on tougher regulation to help create more capacity.

Five years ago, the government published a 30-year air transport policy document. It was born following an exhaustive consultation process, which was open to every person in the country. An impressive 500,000 people from all over Britain participated, a reflection on what a crucial part airports play in people’s journeys.

The policy document recognised that new capacity remains the key issue facing Britain’s airports. It recommended that two new runways should be built in the south-east – one at Stansted and one at Heathrow, provided robust environmental conditions could be met.

Do you think the breakup of BAA’s airport empire will help improve things for passengers? Or is a complete rethink needed on how airports are run?

4 comments

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I’m guessing Branson will be very happy about this!

Posted by Matt | Report as abusive

A breakup is the way forward. The danger is that the dead hand of regulation will prevent competition between the airports. There will be no improvement unless there is free competition between them in attracting both airlines and passengers.

Posted by Peter | Report as abusive

This is flawed for 2 reasons: BAA has 40 years of running airports badly. It is therefore time they were pruned. More regulation is a nonsense solution that will by no means increase capacity. More runways and the breakup of BAA are both essential. Less regulation will also improve matters.

Posted by Findlay | Report as abusive

I think Heathrow should at least be run by a British company.

After all, Madrid would love to lift Heathrows crown as the European hub?

Posted by The Truth Is... | Report as abusive