BAA loses court battle on sale of airports
More bang for your buck
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BAA loses court battle on sale of airports
Full article : BAA loses court battle on sale of airports* - Yahoo! News UK
BAA will have to break up its network of British airports after the Court of Appeal on Wednesday overruled a previous decision in BAA's favour.
BAA, owned by Spain's Ferrovial, will have to dispose of Stansted airport northeast of London and either Edinburgh or Glasgow airports in Scotland within two years, after the court said an original ruling by the Competition Commission had not been influenced by bias.
BAA said in a statement on Wednesday it was disappointed by the ruling and would be seeking permission to appeal to the Supreme Court.
BAA, owned by Spain's Ferrovial, will have to dispose of Stansted airport northeast of London and either Edinburgh or Glasgow airports in Scotland within two years, after the court said an original ruling by the Competition Commission had not been influenced by bias.
BAA said in a statement on Wednesday it was disappointed by the ruling and would be seeking permission to appeal to the Supreme Court.
apron - there has been some discussion on here before, but it seems likely that BAA are more interested in retaining than Edinburgh than Glasgow
Should BAA then sell Glasgow, you would expect greater competition between Edinburgh and Glasgow, and prices at one or both airports may fall.
Currently, residents of
Edinburgh - have a choice of EDI or GLA airports, but these have a common owner and competition between the 2 is limited
Glasgow - have a choice of EDI, GLA and PIK airports, which have a total of 2 owners
In future, residents of
Edinburgh - will have a choice of 2 separately owned airports
Glasgow - will have a choice of 3 separately owned airports
One would therefore expect that GLA airport will feel more of the effects of competition, and customers may well see either lower airport fees or improved service, or maybe a mixture of the 2.
It is likely that given the distance of Prestwick from Glasgow (yes, I know there's a half-price train every 30 mins to Central), that Prestwick will be forced to increase their focus on being low-cost, and that Ryanair + Wizzair will try harder to play PIK off against GLA
Should BAA then sell Glasgow, you would expect greater competition between Edinburgh and Glasgow, and prices at one or both airports may fall.
Currently, residents of
Edinburgh - have a choice of EDI or GLA airports, but these have a common owner and competition between the 2 is limited
Glasgow - have a choice of EDI, GLA and PIK airports, which have a total of 2 owners
In future, residents of
Edinburgh - will have a choice of 2 separately owned airports
Glasgow - will have a choice of 3 separately owned airports
One would therefore expect that GLA airport will feel more of the effects of competition, and customers may well see either lower airport fees or improved service, or maybe a mixture of the 2.
It is likely that given the distance of Prestwick from Glasgow (yes, I know there's a half-price train every 30 mins to Central), that Prestwick will be forced to increase their focus on being low-cost, and that Ryanair + Wizzair will try harder to play PIK off against GLA
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thats a very well balanced post there, i aggree that it allows ryanair 2 keep pik on there toes, basically ryanair get future deals at pik at what they want. Which is already a very good deal indeed.
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Heres how I see it
GLA will be sold, FR will move to GLA, EDI will stagnate slightly under ongoing BAA control. PIK will lose all scheduled flights and be cargo, maintanence and occ IT only. (Revisit this post in 3 years time)
GLA will be sold, FR will move to GLA, EDI will stagnate slightly under ongoing BAA control. PIK will lose all scheduled flights and be cargo, maintanence and occ IT only. (Revisit this post in 3 years time)
CabinCrewe - why should EDI continue to stagnate under ongoing BAA control ? I would have though that if GLA and EDI are competing against each other, that EDI management will have to make greater efforts to retain existing and attract new routes ? BAA no longer have an incentive to set EDI fees as if it had an effective monopoly on flights to the central belt. Because travel between GLA and EDI is realtively easy, passengers have a credible choice as to which airport to use for a significant proportion of flights. Further, EDI does not have the benefit of the network effect of an international hub like LHR
In effect it's a wake-up call telling EDI to get off their backsides and see GLA as the opposition rather than as good mates
In effect it's a wake-up call telling EDI to get off their backsides and see GLA as the opposition rather than as good mates
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Read my post again. I did not say EDI will "continue" to stagnate. EDI has done well over the past few years as BAA prime it up at the expense of GLA (which it will ultimately offload). Once the requirement to focus attention on one or the other has been lifted and the BAA portfolio shrinks, attention will be focussed purely on LHR. The catchment and target populations are completely different between GLA and EDI so I think it is unlikely there will be a direct like for like competition between the two even in independent hands. Again, I say, revisit this post in 3 years time.
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GLA will be sold, FR will move to GLA, EDI will stagnate slightly under ongoing BAA control. PIK will lose all scheduled flights and be cargo, maintanence and occ IT only. (Revisit this post in 3 years time)
Remember it has been stated elsewhere that the offer from BAA was the same at EDI and GLA and FR took it up at EDI but not at GLA (no doubt due to the existing PIK operation). So in order to attract Ryanair from PIK it will have to be even better (cheaper). This all depends on whether the new operator chooses to play the long game or are in for a fast buck.
Anyway, why are you so certain that they will sell GLA. They may have groomed EDI to get best price. Personaly I agree with you but none of us can be sure of what airport will be sold.
Now if I was Ferrovial I would offer up both airports for sale and weigh up the offers for each against the potential for revenue at the one retained.Who knows they could get offers they could not refuse for both and sell the pair to cut their debt mountain (to separate organisations otherwise the Monopolies Commission would be rolled out again).
We live in interesting times and we will all have to wait and see and I am certain things will not pan out as any of us expect. Prepare for some surprises along the way.
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Because travel between GLA and EDI is realtively easy, passengers have a credible choice as to which airport to use
The other effect of the sale will be, as has been explored here, an even greater Ryanair competitive edge over Infratil at Prestwick. Prestwick's in a difficult enough financial state as it is. There's nothing left for O'Leary to wring out of them. If Glasgow offers him a good deal he'll leave Prestwick, which will then be in the same position as their other UK airport at Manston - scratching around for cargo and charters.
Airports, like railways, were recognised for decades as being a public infrastructure asset. If the end result of "competition" is a reduction in supply (e.g. no more schedules from Prestwick) then it's self-defeating.
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heres a breakdown on what the ryanair deal at pik, landing fees, handling, ground power, parking, luggage handling, fuel transportation from bp, all for free, surely that must be an extremely competitive deal, do ryanair have a deal like that anywhere else or is that a normal deal for ryanair?
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BAA - let loose your grip on Glasgow before you make it more **** than it already is! And new owners of Glasgow... don't let Ryanair anywhere NEAR the bloody place! Disastrous, keep them at bay.!! 
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Yeah, whether the airport is owned in the future by BAA or new owners, hopefully FR will not be at GLA! There are other far more attractive avenues for growth like BE and EZY.
It would be tempting though from any new owner's point of view to deal in FR and immmediately boost pax numbers - I believe MOL has recently been quoted as saying they may look to use more main airports to drive up yield. This may well, as discussed, kill of pax ops at PIK which would mean that FR couldn't threaten to go back to PIK if GLA upped charges! It does also possibly mean that a sale of GLA which is supposed to generate more competition could actually lead to no more pax ops at PIK and hence less competition!
Who knows what'll happen! If GLA is to be sold though, the transition period will almost certainly have a some period of crossover where development will be limited, something GLA could do without imo. However, I think the airport will benefit in the longer term from new owners. Whilst it's difficult to prove any wrongdoing by BAA, one has to suspect that they have at the very least expended very little effort in developing some sectors, such as European scheduled traffic, at GLA, leaving the city with disgracefully poor air links to the continent, thus hindering business and inbound tourist development.
Given their behaviour so far, I can't see BAA accepting this decision, so I think they will appeal again, introducing another 6-12 months of delay. Even if they know they're not going to be successful, it's worth it just to delay a sale and hope the prices goes up in the meantime. I also suspect the Scottish airports issue is a sideshow as far as BAA are concerned - Surely STN is the airport they're fighting to keep?
It would be tempting though from any new owner's point of view to deal in FR and immmediately boost pax numbers - I believe MOL has recently been quoted as saying they may look to use more main airports to drive up yield. This may well, as discussed, kill of pax ops at PIK which would mean that FR couldn't threaten to go back to PIK if GLA upped charges! It does also possibly mean that a sale of GLA which is supposed to generate more competition could actually lead to no more pax ops at PIK and hence less competition!
Who knows what'll happen! If GLA is to be sold though, the transition period will almost certainly have a some period of crossover where development will be limited, something GLA could do without imo. However, I think the airport will benefit in the longer term from new owners. Whilst it's difficult to prove any wrongdoing by BAA, one has to suspect that they have at the very least expended very little effort in developing some sectors, such as European scheduled traffic, at GLA, leaving the city with disgracefully poor air links to the continent, thus hindering business and inbound tourist development.
Given their behaviour so far, I can't see BAA accepting this decision, so I think they will appeal again, introducing another 6-12 months of delay. Even if they know they're not going to be successful, it's worth it just to delay a sale and hope the prices goes up in the meantime. I also suspect the Scottish airports issue is a sideshow as far as BAA are concerned - Surely STN is the airport they're fighting to keep?
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the yields on pik routes are very strong, 25min turnaround almost gauranteed, massive maintence base, and almost use the airport for nothing! Why would they move and leave that deal?
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load factors are good, very good on the bucket and spade routes, always around the 170+mark. Summer at pik was very good and a success, whats the benefits of moving 2 gla when there strengthening at edi? Surely pik and edi gets them the best of both worlds? Edi for inbounds and pik outbound.
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Sale commences!
Just released 17 Feb. BAA has not been granted the permission from the Supreme Court to appeal to the Court of Appeal's decision regarding investigation into the supply of U.K. airport services. - EGSS/STN and EGPH/EDI or EGPF/GLA sale resumes?
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The way I see it (and I'm no economist or expert on aviation) is that Glasgow and Prestwick operate for seperate markets than Edinburgh.
GLA and PIK are more oriented for the holiday and leisure market with highly seasonal operations while EDI is more business pax oreiented and has a steadier flow of passengers year round. Which depending on the airport sold leads to the new owner possibly trying to redress the balance, (eg EDI getting more bucket and spade routes and GLA and PIK getting more city routes).
I personally think there is enough demand for 3 passenger operations airports in Scotland, PIK catering Ryanair, Wizz, the odd charter and maybe a regional airline offering city routes, GLA with the major charter companies, long haul leisure, EZY and FlyBE. While EDI continues to offer business routes and maybe expands into a more substantial leisure route network.
As for which airport is sold, I wouldn't like to guess, but I refer to a previous post I put up referring to a lecture by Victoria Barby of BAA Edinburgh, who as head of environment there has dealings with senior management and she expects it to be EDI that is sold. However I wouldn't read too much into that. One thing is for certain, it's going to be interesting!
GLA and PIK are more oriented for the holiday and leisure market with highly seasonal operations while EDI is more business pax oreiented and has a steadier flow of passengers year round. Which depending on the airport sold leads to the new owner possibly trying to redress the balance, (eg EDI getting more bucket and spade routes and GLA and PIK getting more city routes).
I personally think there is enough demand for 3 passenger operations airports in Scotland, PIK catering Ryanair, Wizz, the odd charter and maybe a regional airline offering city routes, GLA with the major charter companies, long haul leisure, EZY and FlyBE. While EDI continues to offer business routes and maybe expands into a more substantial leisure route network.
As for which airport is sold, I wouldn't like to guess, but I refer to a previous post I put up referring to a lecture by Victoria Barby of BAA Edinburgh, who as head of environment there has dealings with senior management and she expects it to be EDI that is sold. However I wouldn't read too much into that. One thing is for certain, it's going to be interesting!