Gatwick Airport is to be put up for sale by its owner BAA, says BBC Transport Correspondent Tom Symonds.

The move comes four weeks after competition watchdogs said BAA may have to sell three of its UK airports.

Several firms are said to be interested in the UK’s second biggest airport – last week Virgin said it was interested in being part of a buying consortium.

Other potential bidders for Gatwick, valued at £1.8bn by regulators, are said to include MacQuarie and Fraport.

Shake-up

Last week, Virgin Atlantic – half owned by Sir Richard Branson – told the Daily Telegraph it would be interested in being part of a consortium to buy Gatwick Airport.

Its comments came two weeks after the Competition Commission said in an interim ruling that BAA may have to sell three of its UK airports.

Although the Commission does not release its full report until next year, it added that BAA may need to sell two of its three London airports.

BAA ruled out selling Heathrow, which leaves Gatwick and Stansted.

The Civil Aviation Authority has just increased the amount Gatwick – where 35 million passengers passed through in 2007 – can charge in landing fees.

But it is operating on one runway and approaching full capacity.

Our correspondent says it is likely to take months to find a buyer and negotiate the deal.

News reported by The BBC

BAA may have to sell three of its seven UK airports because of concerns about its market dominance, the Competition Commission has said.

The watchdog is recommending that the airport operator should have to sell two of its three airports in the South East – Heathrow, Gatwick and Stansted.

It also believes BAA should not be allowed to continue to own airports in both Glasgow and Edinburgh.

BAA said it had “no intention” of selling Heathrow, its largest airport.

It described the regulator’s verdict as “flawed” and said the forced sale of leading airports would be “counter-productive”.

The final decision on the company’s future will be taken next April.

Ownership concerns

Publishing the preliminary findings of its inquiry into BAA’s control of the UK’s largest airports, the commission said BAA’s current ownership structure was having “adverse consequences” for passengers and airlines.

BAA, owned by Spanish company Ferrovial, has been fiercely criticised for poor customer service and delays at its airports, particularly Heathrow.

The commission said many of the problems of recent years were due to the “common ownership” of Heathrow, Gatwick and Stansted, which account for nearly 90% of departures and arrivals into London.

It will now consult on whether it is appropriate for BAA to have to sell two of its three flagship airports but the disposal of Gatwick and Stansted now looks likely.

Should these two airports be sold, the commission said they should be owned separately in the future to promote competition.

The regulator said BAA had shown a “lack of responsiveness” to the needs of airlines and a “lack of initiative” over expanding capacity.

“This has resulted in investment that is not tailored to the requirements of airport users and lower levels and quality of service for both airlines and passengers,” Christopher Clarke, who headed up the inquiry, said.

He added: “BAA has argued that there is no scope for competition to develop so long as there are capacity constraints. We take the opposite view. Unless the market is opened up to competition, there is a serious risk that the current capacity constraints will persist.”

‘Disproportionate’

The commission said that BAA was likely be allowed to keep control of Southampton and Aberdeen airports as the competition concerns there would be settled by other disposals or were, in Aberdeen’s case, caused by particular factors.

BAA’s chief executive Colin Matthews said he accepted the report’s concerns about “poor service” and “frustration” for passengers.

He declined to comment on the future for individual airports but said BAA had “no intention of selling Heathrow”.

He said the break-up of the company could threaten efforts to build new runways at airports in London, seen as vital to boosting passenger capacity and keeping the city competitive as a business location.

“We will continue to point out to the commission the many areas where we believe its analysis is flawed and its remedies would be disproportionate and counter-productive,” he said.

The union for aviation specialists challenged the Competition Commission’s proposal for BAA to sell off three of its airports.

‘Clear tension’

Garry Graham, aviation secretary for Prospect union, which represents many BAA managerial, technical and support staff, said: “We fear the proposals put forward by the Competition Commission will lead to greater fragmentation and undermine a coherent and strategic approach to service delivery.”

He added: “In reality, many of the travelling public have little choice as to the airports they are served by and can use. We question the principle of ‘market based solutions’ in this context.”

And he said there was “clear tension” between the findings of the Competition Commission and government policy as set out in the 2003 Air Transport White Paper.

Airlines applauded the regulator’s findings but said the whole regulatory framework of airports needed to be reviewed.

“It is a good start,” said Easyjet chief executive Andrew Harrison.

“We are very pleased that the Competition Commission has recognised what is a fundamental problem for UK airports.”

Virgin Atlantic said BAA “still acted like a monopoly” and had neglected much-needed improvements at Gatwick, focusing instead on Heathrow.

It called for different companies to be allowed to operate separate terminal buildings at airports such as Heathrow.

“That is the sort of change we need to see,” its spokesman said.

News reported by The BBC

The chairman of the UK’s largest airports operator, BAA, has said he expects the Competition Commission to order the break-up of the company.

Sir Nigel Rudd told the BBC’s Robert Peston he believed such a decision would not lead to effective competition against BAA’s prime airport Heathrow.

Our correspondent said it was likely to mean BAA being forced to sell key airports in England and Scotland.

BAA has come under fire for poor service and excessive airline charges.

The firm owns Heathrow, Gatwick, Stansted, Edinburgh, Glasgow, Southampton and Aberdeen airports.

With a near monopoly on airports in the South East of England and in Scotland, there have been concerns that BAA – which is saddled with debt from its purchase by Spanish property group Ferrovial in 2006 – can only focus on one development project at a time, causing capacity problems.

This prompted an inquiry by the Competition Commission, which is expected to announce its provisional findings next week.

Airport sale

Speculation is mounting that the regulator will conclude that BAA’s ownership of seven UK airports is not in the public interest.

“[From] all the things that I’m hearing, it looks like they will announce that,” conceded Sir Nigel.

This could force BAA to sell either or both London’s Gatwick and Stansted airports and also Edinburgh or Glasgow airport.

But Sir Nigel said that the break-up of BAA would not be a “disaster”.

He said that BAA’s owners have already had “huge expressions of interest” from potential buyers of Gatwick and Stansted, though neither are currently for sale.

And he is confident that the downturn in the airline industry due to rocketing fuel costs and tightening household budgets, has not depressed in a serious way what Ferrovial and its partners would receive from a sale.

Global competition

Yet even though the Heathrow proprietors could cope with the disposal of these airports, the BAA chairman disputes the claims that a sale would increase competition between the airports due to Heathrow’s prime location.

Sir Nigel said: “Heathrow does not compete with Gatwick and does not compete with Stansted or Luton or Manchester.

“It competes with Charles de Gaulle [in Paris], Dubai now and [Amsterdam's] Schiphol, because these are big international hub airports so the ownership of the airports has nothing to do with competition.”

In fact, he says fulfilling the requirements set out in the government’s 2003 aviation White Paper will make it more difficult if the airports were under different ownership.

The former transport minister, John Spellar, agreed that Heathrow’s real competition lay with major European airports, as well as Dubai, which wants to be a hub airport.

“We actually have a real jewel in the crown for the United Kingdom in the strength of Heathrow as a hub airport – that’s why it needs that extra capacity,” he said, adding, “that’s the real issue for the public, rather than actually just questions of ownership.”

A third runway?

Sir Nigel also spoke in the interview of his views on the Conservative Party having expressed reservations about the need for a third runway at Heathrow.

He said he believed that if elected to office, David Cameron would see the desirability of expanding the airport.

But Theresa Villiers, who speaks on transport for the party, told BBC Radio Four’s Today programme the economic and environmental case for a third runway had yet to be proved.

“There’s no serious research on the value of transfer passengers. Neither the government nor the studies on this have looked at the cost of the increase in pollution in the area around Heathrow,” she said.

She added that the government had not costed the carbon impact of international inbound flights.

Ms Villiers said one of the alternatives the Tories were looking at was high-speed rail.

Airline speculation

Some airlines have welcomed the push for a break-up, amid speculation that an airline consortium may buy a BAA airport.

Ryanair denied it was looking to buy Stansted airport, but said it would “review our position” if there was a “very attractive” price.

“We’ve been calling for the break-up for a long time and the need has escalated every year,” said the company’s Stephen McNamara.

“What we would really hope is for Stansted to also be taken out of BAA ownership. It would be a token gesture to just sell Gatwick.”

News reported by The BBC

Baggage handlers and check-in staff at Gatwick and Stansted airports are to strike on Bank Holiday Monday in a row over pay, unions say.

At Gatwick, 318 Swissport workers will walk out for 24 hours, halting services at some airlines. A second strike is planned for Friday 29 August.

The staff have rejected a 3% pay offer which the Unite union said was “an insult” and well below inflation.

Workers from two unions at Stansted have also voted to strike.

Unite said industrial action could spread to other airports in the coming weeks.

Workers at Manchester Airport will put the decision to a vote on Monday, and further ballots are expected later at Birmingham and Newcastle airports.

Unite members working for Swissport at Stansted will be joined by 30 members of the GMB union when they walk out on Monday 25 August and Friday 29.

The GMB members, who work for Airfield Services screening baggage for Ryanair and easyJet, have rejected a 1.5% pay offer.

Cost of living

Unite has more than 300 members at Gatwick, 72% of whom voted in favour of striking. They want to see a pay increase of more than 5%. This pay offer is an insult to professional, hard working men and women

Steve Turner, Unite

Airlines including Virgin Atlantic, Monarch, Thomson Fly and First Choice would be affected if the action later this month went ahead.

National officer Steve Turner said: “Our members are already struggling to keep up with rising food and energy costs.

“This pay offer is an insult to professional, hard working men and women who have to operate in extremely difficult conditions.

“Our members have had enough. The liberalisation of ground handling services across UK airports has resulted in a race to the bottom which must and will stop.

“We will not stand back and allow labour costs to determine whether contracts are won or lost.”

‘Minimise disruption’

Swissport said it was aware that a “small number” of its staff were planning to strike.

A spokesman said: “Swissport believes that a fair offer has been made to the unions in the light of the current economic climate that reflects the cost of living increase.

“Swissport is working with the airport operator and the customer airlines to minimise disruption to the travelling public.”

Gary Pearce, from the GMB, said the Stansted workers were due a pay rise last January but their employers had been “dragging their feet”.

“These workers are doing one of the most vital jobs in the airport but are among the lowest paid,” he said.

In January, planned strikes at Gatwick and six other airports were called off after BAA eased plans to alter workers’ pension rights.

News reported by The BBC