BAA to sell Edinburgh Airport over competition rules

Glasgow and Edinburgh Airports BAA was ordered to sell either Glasgow or Edinburgh Airport

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Edinburgh Airport is to be sold by operator BAA after it was told by competition regulators to let go of one of its Scottish hubs.

BAA is now beginning preparations for a sale and expects to formally approach the market in the New Year with a view to agreeing a sale by Summer 2012.

The organisation's chief executive Colin Matthews said they would be "very sorry to see it leave BAA".

The firm will keep Aberdeen Airport and Glasgow Airport.

BAA, of which Spanish company Ferrovial is a major shareholder, operates six UK airports including Heathrow and Southampton.

After a long inquiry, which has led to numerous legal challenges, the Competition Commission found that BAA's ownership of UK airports was anti-competitive and ordered the company to sell Gatwick, Stansted and one of either Glasgow or Edinburgh.

Gatwick has already been sold to an American concern and BAA is still disputing the Stansted decision.

'Difficult decision'

Mr Matthews said: "Edinburgh is a great airport with a great team and a great future and we will be very sorry to see it leave BAA.

"We remain committed to Scotland and we will continue our long-term investment to improve passenger and airline experience at Aberdeen and Glasgow, as well as at Edinburgh until the sale is complete.

Analysis

BAA didn't want to sell airports, but it's being forced to, and it's much more concerned about finding a buyer for Stansted than about the loss of Glasgow or Edinburgh.

Forced to sell one of the central belt airports, Edinburgh has been performing much better and can command a better price. Glasgow has long-haul strengths, but it has found the downturn tougher, it has fewer lucrative business passengers, and it's in a less attractive location for ground transport. It would secure less cash for BAA, and it might have been harder to find a buyer.

Will passengers notice any difference? The two airports will step up their competition to attract airlines - the very reason they're being told to split.

They will also want to market themselves in each other's core market, with Edinburgh well placed to reach westward and brand itself as "central Scotland's airport".

"Choosing which airport to sell has been a difficult decision.

"Edinburgh Airport has shown itself to be a strong and resilient asset throughout the economic downturn.

"Passenger numbers at Edinburgh have grown by more than 6% over the past year and in an uncertain market we expect it to be an attractive asset to prospective buyers.

"Glasgow Airport has great opportunities for future growth and development and we think BAA is well-placed to build on its recent success. Both airports are of national importance and have a bright future."

Jim O'Sullivan, managing director of Edinburgh Airport, said: "Today's announcement brings the clarification that many had been calling for and although we will be sorry to leave BAA, we do so in the knowledge we're in an extremely strong and healthy position.

"Not only has Edinburgh Airport benefited from considerable investment in recent years but we have an excellent team in place which has been the driving force behind our success to date.

"We will now begin preparing for the sale process, but irrespective of who may own it, the team at Edinburgh Airport will undoubtedly continue to deliver for its passengers, the city and Scotland as a whole."

Amanda McMillan, managing director of Glasgow Airport, said: "Clearly we welcome today's announcement as it marks the end of what has been a prolonged period of uncertainty.

"Now a final decision has been reached we can concentrate our efforts on ensuring Glasgow Airport, as part of BAA, continues to deliver for its passengers, the city and Scotland as a whole."

Tom Buchanan, Edinburgh City Council's economic development convenor, said: "It's vital to the city, to the region and to the country as a whole that Edinburgh has an excellent international airport, building on its performance of recent years and developing more new, direct services to key destinations.

"The question of ownership is not one for the council but we clearly have a very strong interest in the airport's success.

"So, we look forward to working with any new operator in ensuring that the airport continues to play its essential role as a transport hub and as a major contributor to Scotland's economy."

Edinburgh Airport is Scotland's largest airport with about 9.2m passengers predicted to pass through it this year and with over 100,000 flights.

Edinburgh directly employs 485 staff and supports 7,500 jobs across Scotland.

BAA made a £42m investment in 2010 in Edinburgh Airport's departure lounge and security hall.

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