Airport Privatisation

Beesley Lecture 5 November 2009: The development of competition in the UK airport market
Beesley Lecture – 5 November 2009 by Harry Bush CB Group Director, Economic Regulation, CAA ‘The development of competition in the UK airport market’1 Introduction 1. There can have been few times since the privatisation of BAA in the late

1980s when there has been so much change – and attendant uncertainty –

around the UK airports market. In addition to the impact of the most

significant economic reverse in the aviation market since the War we await

the Government’s decision on its Review of Economic Regulation (although

we had a taster announcement a few weeks ago on financing); there appears

to be a significant political divide over the future growth of capacity in the

South East which is unlikely to begin to be resolved until next year; and there

is discussion about whether and how far high speed rail may substitute for

and/or complement airport capacity.

2.

There is also some uncertainty around future ownership structures in the

market given BAA’s appeal of the Competition Commission’s (CC’s)

I would like to thank CAA colleagues, and in particular Chris Hemsley, for assistance in preparing this lecture.

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Beesley Lecture 5 November 2009: The development of competition in the UK airport market
divestment remedies to the CAT, on which judgement is awaited. However,

the recent announcement of the sale of Gatwick itself represents a significant

potential injection of competition into the UK airport market around London.

And there is the clear possibility of more to follow in the South East and

Scotland.

3.

Against that background, this year’s Beesley lectures provide a timely

occasion both to review the current position of the market and, looking to the

future, to consider the role that the regulator and Government can play in

seizing the opportunity to foster competition presented by the most...