BAA is the owner of seven British airports, and the operator of several other airports worldwide, making it one of the largest transport companies in the world. With all of this power, it is understandable that the Office of Fair Trading has looked into a possible monopoly this company holds over London’s three largest airports. In August the UK’s Competition Commission released provisional findings stating that BAA may have to sell two of its London airports.
This in turn has lead to BAA having to sell Gatwick. This airport is estimated to be valued at roughly £1.8bn. Companies wishing to purchase Gatwick are likely to inherit continued growth in passenger numbers, rent from a vast amount of shops, proceeds of nine car parks, as well as landing charges. The following video highlights the benefits for the new transport providers.
This in turn has lead to BAA having to sell Gatwick. This airport is estimated to be valued at roughly £1.8bn. Companies wishing to purchase Gatwick are likely to inherit continued growth in passenger numbers, rent from a vast amount of shops, proceeds of nine car parks, as well as landing charges. The following video highlights the benefits for the new transport providers.
This video also portrays the potential for improvement in customer service, such as shorter queues etc.
Here, Richard Branson expresses his interest in bidding for Gatwick, and explains how Virgin Atlantic can bring benefits for the consumers
Here, Richard Branson expresses his interest in bidding for Gatwick, and explains how Virgin Atlantic can bring benefits for the consumers
Having assessed the potential benefits for both producers and consumers, we believe the Competition Commission were correct in their decision combat BAA’s monopolising power in London’s main airports. The entry of a new owner will increase competition within the air travel market, leading to a greater service and lower prices for customers. Perhaps the increased competition will provide BAA with the incentive to improve their overall customer service at airports nationwide.
As explained in the first video, Stansted has development plans to expand, which softens the loss of Gatwick. Regardless of BAA selling this airport, we believe the company will continue to be the dominant firm within the market for the foreseeable future.
Perhaps in the long run, we think that the competition commission should encourage BAA to consider bids for their current airports. Perhaps the transition from a monopoly to a more competition based market structure is the way forward.
As explained in the first video, Stansted has development plans to expand, which softens the loss of Gatwick. Regardless of BAA selling this airport, we believe the company will continue to be the dominant firm within the market for the foreseeable future.
Perhaps in the long run, we think that the competition commission should encourage BAA to consider bids for their current airports. Perhaps the transition from a monopoly to a more competition based market structure is the way forward.
REN & BEN productions
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