BAA in legal challenge to break-up decision

BAA is challenging the directive by the commission in March this year that it had to sell Gatwick and Stansted airports and one from Edinburgh or Glasogow, after criticism of the services it offered.

The company, owned by Spanish operator Ferrovial, is fighting back, saying that the decision should take into account the fact that revenue streams will be affected by the current economic environment.

BAA has already put in place the sale of Gatwick airport but it suffered a first-quarter loss of £316m as passenger numbers dropped 10 per cent due to the world downturn.

More seriously, BAA accused the commission of "apparent bias", because of "links between a member of the Competition Commission panel and an organisation interested in acquiring the airport that BAA is required to sell."

The individual concerned is believed to be Professor Peter Moizer, an advisor to the Greater Manchester Pension Fund, part of the Manchester Airport consortium that was one of the two bidders for Gatwick.

Although he stepped down from the commission panel investigating the airports operator 16 days before the final report was released BAA alleges that the apparent bias was not fully dealt with by the Commission.

A Competition Commission spokesman said of Prof Moizer’s involvement: "His interest was declared at the start of the inquiry." The appeal will be investigated by a tribunal headed by Sir Gerald Barling QC, which is likely to meet in July and release its decision several months later.

WHAT THEY ARE SAYING
Andrew Fitchie, aviation analyst at broker Collins Stewart, in the Times: "This could be a delaying tactic until credit markets improve and the economic performance of the airports rebounds, which would enhance the valuation that BAA could ultimately achieve."