Breaking (BAA) up is hard to do


Another day, another blow for BAA. After months of speculation, the Competition Commission has indicated that BAA might have to sell off Gatwick to break up their monopoly over London's airports. While the papers are taking great delight in kicking BAA while it's down, I'm getting worried. Could splitting up the monopoly lead to more airport expansion?

According to the Evening Standard, the Commission condemned "A 'short-term and reactive' approach to airport expansion. Major decisions about infrastructure have 'generally been too late to meet demand'." If that wasn't enough to worry you, try this accusation: "BAA managers have also too easily given commitments not to expand further at an airport and abdicated responsibility to government for strategic planning."

See where this is going? If failing to expand enough is one of the reasons the monopoly was failing, then it follows that breaking it up would lead to more expansion. This is pretty logical: if Stansted, Gatwick and Heathrow were competing with each other, they'd all want more space to do it in. Sure, one might target low-cost carriers, another business, but chances are they'd all want a slice of every pie.

Expansionists already argue that failing to expand Heathrow will give Frankfurt or Schiphol an advantage; it doesn't take a genius to see the same argument applied to competition between London's airports. That's what worries me. While I'm happy to have a go at BAA, I'd rather be fighting them - bloated monopolistic incompetencies and all - than taking on three airports trying to cut costs, squeeze margins and cram as many flights into the skies over London as possible.

Just my two pence. Let the BAA-bashing continue.