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Speculation has been mounting that further interest rate cuts will be announced by the Bank of England, after minutes from its previous meeting on cuts were released. They reveal that the Bank's n...
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Thursday 21st August 2008
As the much rumoured report which will prompt the breakup of BAA lands on investment managers desks this week, the argument has moved on to a new phase with concerns that the breakup of the group may have little impact on the UK airport sector. The Competition Commission will take formal action to force BAA to sell off two of their three London airports and one in Scotland in what is the biggest shake-up of the industry in decades. But will the new players be able to inject more competition into the sector?
While a sale of Heathrow would never be contemplated it seems that Gatwick and Stansted will soon be falling into new hands. However, will new owners be more likely to invest in services and new runways? Or will they still hit the same problems that BAA has been experiencing for years, government intervention to delay and block plans?
BAA would be one of the first to say that airport services in the UK could be better and competition would hep the consumer but if they are unable to expand and increase their income where is the incentive to invest into current assets?
The harsh truth is that even a breakup of the UK airport industry may offer little benefit to the UK consumer in the short term unless the authorities change their tack on expansion plans. Even then many will argue why they held BAA back for so long at airports such as Heathrow where they had to fight tooth and nail for years to expand. |
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