Gatwick and Stanstead to be sold

[Darren Wheeler]

The Competition Commission has finally confirmed that BAA must sell both airports.

http://newsvote.bbc.co.uk/1/hi/business/7951377.stm

...and either Edinburgh or Glasgow.

Notice that everyone has been on bleating about how this will be good for the consumer and reduce fares.

How can fares be reduced when after you strip away all the charges and taxes some of then are around 35/40

Now in my mind 35/40 to fly anywhere, NEVER MIND across the atlantic is a pretty good deal for consumers at the moment !

Its all the taxes that need to be sorted out.

David

I, for one, am very cynical that this will result in a better environment for passengers. There's a large argument that whether with or without BAA investment will improve things and there'll be no effective measure of which approach will have worked better.

It's all politics to me.

Not sure how this really helps us the consumer as the landing fees etc are just a small part of the ticket costs. Is anyone really going to change the airline they fly on because the fare is 50p less at airport X compared to airport Y.

Lets say that even if the new owners of LGW and STN reduce their fees (which will still be regulated by the CAA) that won't automatically mean airlines will move from LHR as they will have other very large costs to meet in moving staff, setting up new lounges and other infrastructure and that all costs .

They will also want to consider how them moving will affect their alliances with other airlines.

I fly from LGW and LHR because its convenient to where I live. For me STN is a right bind (and expensive) to get to but for others its the other way round.

Yes, BAA needs to pull its socks up but some of the criticism it gets is for things that are not its responsibility - long queues at check-in for example are ALL down to the airlines.

In the long run, I think, this will have an effect on the consumer. Whilst I agree the BAA fees make up a small proportion of the total flight fee I feel that it will be the added advantage of having different operators in the area which will help consumers out.

If you take a look at anyone living in Sussex, Hampshire, Surrey you quickly begin to realise that their closest (viable) non BAA run airports are either Bristol, Birmingham or Luton (I question if Luton is really viable). That is unfair on the consumer and change is good thing in this circumstance. I would also question BAA's efforts in keeping carriers at LGW for the last 3 years. I wonder how many US carriers were offered incentives, for example, to keep services at LGW. I doubt anywhere but had the two airports been operated by different companies it would have been a different story.

Having said that, one must question whether Fraport, MAG or whoever comes in for these two airports will actually run the place better than BAA have. I fear not. Landing fees may come down but as others point out, will this be passed onto the consumer? I am not holding much hope for a huge water feature and beautiful indoor landscaped gardens (a la Singapore) when all these airport companies seem to have dollar signs in their eyes!

So what will change? Not a lot really. The yellow BAA style signs will disappear but to the consumer that will be about the only change.

Gatwick has the potential for the most change though. If I were bidding for LGW you would seriously be wondering if you could establish a real alternative to LHR. If LGW was turned into some airport utopia (which I doubt) then I can imagine all of us preferring it over LHR! Sadly this wont happen but we can live in hope.

You see, I don't get this unfair argument. I categorise it in the let's just bash BAA for the sake of it slot. So, BAA has owned all three of LHR, LGW and STN yet they are very different airports with different customer profiles which may actually serve their respective markets (with some overlap). Aiming for a new LGW to go head to head with LHR is surely a strategy of failure - I'm not sure there is any major city in the world where two airports compete on a par basis - I guess EWR and JFK come close, but the reason there is that Continental really invested in EWR and are the dominant carrier. Is Virgin big enough to do the same at LGW, would LH move all its carriers to LGW? Who else ... ahhh Ryanair / EasyJet [:D].

Nor do I see prices really falling, think this, any buyer needs cash, there's not a lot about so they'll have to borrow it. That means debt. Even with low interest rates debt needs funding = landing charges, shops and tight cost management.

quote:Originally posted by slinky09
You see, I don't get this unfair argument.I categorise it in the let's just bash BAA for the sake of it slot.


No I am not bashing BAA for the sake of it. It is unfair because other than flying out of BAA airport I have no other choice. If there was someone else running LGW and I did not have to put up with stupid people shouting at me in yellow tops and ridiculous short stay parking charges then I would chose LGW over LHR. The point is, at the moment I do not have that choice. Its rather like supermarkets really, where I grew up the only choice of supermarket is Tesco (there are two metro branches, one real branch and a couple of express stores) that is unfair is it not? It does not provide the consumer with any option other than shopping in Tesco.

quote:
So, BAA has owned all three of LHR, LGW and STN yet they are very different airports with different customer profiles which may actually serve their respective markets (with some overlap).


They may well be different but the OFT point is that currently no one else has the opportunity to experience a non run BAA airport. That is unfair on the other airport companies who struggle against the BAA monopoly.

quote:
Aiming for a new LGW to go head to head with LHR is surely a strategy of failure - I'm not sure there is any major city in the world where two airports compete on a par basis - I guess EWR and JFK come close, but the reason there is that Continental really invested in EWR and are the dominant carrier. Is Virgin big enough to do the same at LGW, would LH move all its carriers to LGW? Who else ... ahhh Ryanair / EasyJet [:D].


I was not meaning a direct like with like approach to LHR. That would never work, as we know LHR is heavily reliant on its transit passengers. There are a number of routes lost within the last 2 years that I would imagine another airport operator would have tried a bit harder to keep at LGW. For example the DL JFK service, the American services that were lost heck even the Oman Air service. It is those sort of services that a new operator could attempt to bring in. The new Mexicana service from LGW is a great start. I just cannot believe that LGW's only destiny is as a bigger version of STN/LTN.


quote:
Nor do I see prices really falling, think this, any buyer needs cash, there's not a lot about so they'll have to borrow it. That means debt. Even with low interest rates debt needs funding = landing charges, shops and tight cost management.


I would go one step less than you Slinky. Many potential buyers will not be able to raise the finance in the market at the moment. Many, many firms have seen M+A drop off for this exact reason. That will be one of the main sticking points in deciding who goes in for a bid. I would not be surprised to see some form of Middle Eastern quasi-company coming up with a bid.

It's a good debate ... in my mirror ball I see that if / when runway 3 at LHR comes, airlines will gravitate there even more ... LGW is the odd one IMO, Stanstead is destined to become a bigger LCC hub yet LGW is a bit of everything and not a winner at any ... would you buy it?

[RichardMannion]

BAA did need a kick up the backside. The parking charges are very high, and the airports have to a degree been left to languish in the 80's.

UB is what, ~8.50 per ticket which adds up to a tidy sum on it's own. Then there is the retail; one of my favourite comments was that a BAA airport is like a Shopping Centre with a runway.

You know when it's really busy, put your hand up if you have still seen security stations closed, ditto for immigration - it's not as if they know when the peak periods are is it?.

Do we really need the ex-perfume sellers barking at passengers and waving the plastic bags about?

Making them sell off airports, will it work? Not so sure, but they needed some punishment for running the airports badly over the last decade or so.

quote:Originally posted by RichardMannion

Then there is the retail; one of my favourite comments was that a BAA airport is like a Shopping Centre with a runway.


I used to think this was so true, then I went to Sydney. OMG, beats LHR pants down [oo]

quote:Originally posted by slinky09
It's a good debate ... in my mirror ball I see that if / when runway 3 at LHR comes, airlines will gravitate there even more ... LGW is the odd one IMO, Stanstead is destined to become a bigger LCC hub yet LGW is a bit of everything and not a winner at any ... would you buy it?


I wouldnt buy LGW without some kind of long term plan for what I wanted it to be. One option would be to move all the traditional airlines into their own terminal and give EZY/FR et al the run of the other.

I am going through the North Terminal in a couple of weeks and will be intrigued to see what it is like these days.

The opening of a 3rd runway could really be the final nail in the LGW coffin and turn it into a full LCC airport. After all BA only have a sizable operation ex LGW due to restrictions at LHR.

As for the parking charges LROM, I quite agree. I was shocked to find that some airports (MCO for example) do not charge for the first hour of parking!

quote:Originally posted by willd

As for the parking charges LROM, I quite agree. I was shocked to find that some airports (MCO for example) do not charge for the first hour of parking!


Shocker, eh? When I happened to drive in and out of DFW once, and was not charged, for a stay of about 40 minutes, I kept asking whether there was some mistake.... were they really sure???