UK - Pension funds could be in the running to buy Gatwick, Stansted and Edinburgh airports as the Competition Commission has announced the British Airport Authority (BAA) must sell to generate greater competition and improve its service standards across UK airports.
The Competition Commission has announced, subject to final consultation, it requires BAA to sell the three airports and introduce more efficient measures at Heathrow, to ensure investment and levels of service meet the needs of airlines, passengers and other airport users.
The Commission is also considering selling Glasgow airport as an alternative to Edinburgh's airport, according to Christopher Clarke, chairman of the BAA Airports inquiry.
"Under the common ownership of BAA, there is no competition. Under separate ownership, the airport operators, including BAA, will have a much greater incentive to be far more responsive to their customers, both airlines and passengers," argued Clarke.
BAA, owned by Spanish firm Ferrovial, is understood to have sent confidential documents to potential bidders for Gatwick Airport recently, outlining the possibility of building a second runway at Gatwick rather than at Heathrow to further entice bidders.
BAA is attempting to sell Gatwick by early 2009 though it still claims there is no justification for the Competition Commission to specify which airports it should sell, said Colin Matthews, chief executive at BA.
"As we said when the Competition Commission published its provisional findings in August, we do not believe that it has set out compelling evidence to support its view that selling Stansted as well as Gatwick will increase competition and we remain concerned that its proposed remedies may actually delay the introduction of new runway capacity."
Californian pension funds, the Manchester Airports Group and the Vancouver Airports Authority, are reported to be bidding for Gatwick airport, however, both the California State Teachers' Retirement System (CalSTRS) and the California Public Employees' Retirement System (CalPERS) declined to comment on whether or not they were preparing to make a bid.
Earlier this month, the Ontario Teachers' Pension Fund was working with 3i's infrastructure on a potential bid worth up to £1.5bn (€1.8bn).
The Competition Commission is also suggesting the government make changes to improve the airport regulation system, to give the regulator greater powers to intervene on issues such as performance and financing.
The competition watchdog is proposing, for example, measures to promote investment linked to rebates on charges at Aberdeen Airport.
The Commission will hold a consultation process and is scheduled to publish its final report on BAA's seven UK airports in February or March 2009.