Tuesday, 22 April 2008

Would airports break up add capacity?

Would cracking BAA's monopoly ownership of London's three biggest airports encourage the faster addition of runway and terminal capacity? The final conclusions of the Competition Commission will be fascinating.

I have already argued (see earlier posting) that such a move would be largly futile in terms of stimulating new routes or airline start ups. The Commission, however, is investigating whether separate ownership of Heathrow, Gatwick and Stansted would increase the pace of expansion. It wants to know the extent to BAA's plans to get one job out of the way before embarking on another might be slowing that pace.

If single ownership is indeed applying a brake a break up could clearly provide more capacity, which in turn might improve the passenger experience in terminals and maybe - eventually and for a short period until the extra capacity is absorbed - reduce fares.

But it would not alter the fact that Heathrow is the honeypot for major airlines. It would surely not bring expansion there any earlier, especially given the vehemence with which the green lobby is opposing the proposal that a third main runway should be built there.

The most likely result of a break up would be earlier availability of more elbow room and peak time departure and arrival slots at Gatwick and Stansted.

The Commission may decide that's justification enough - but it is hardly likely to create a revolution in customer choice and service.

And anyone harbouring a vague feeling that somehow monopoly was the blame for the recent Terminal 5 debacle at Heathrow must surely realise that a break up would hardly be guarantee against a similar calamities at London's other two airports.

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