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- #1
Why clip the wings of our city airport?
THE recommendation of the Competition Commission that BAA be required to divest itself of Edinburgh Airport is a decision that beggars belief. First of all we need to ask why has the inquiry been run in the first place?
Not because there are queues of passengers complaining about facilities and service at this crucial gateway. One example of exceptional service would be the way that BAA responded to the security tightening by setting maximum transit times through security checks which considerably diminished delays at boarding. As any business should understand, if you don't take your customers seriously, you won't sustain your business.
The most obvious reason for disquiet is the pressure from airlines for low-cost airport facilities. The two opposing models for minimal infrastructure with a few perimeter sheds and that of an airport which makes a statement about capital city status are both defensible models. The former is obviously cheaper. The latter is what we currently aspire to, and the secondary argument that BAA has (as at Heathrow) "failed to invest in the airport" is so palpably untrue in Edinburgh's case as to encourage derision. The reality is that under BAA's stewardship of Edinburgh and Glasgow airports, aircraft charges have been reduced every year for 15 years, working towards the operators' goals.
We are utterly frustrated at the actual process of the Commission inquiry. As part of its lengthy proceedings into BAA airports, the Competition Commission has frequently asked for the views of stakeholders in Scotland. Time and time again, leading and respected organisations like the Edinburgh Chamber of Commerce have submitted their views. Yet, for whatever reason, the Commission has repeatedly chosen to ignore those views.
Lest you think I exaggerate the extent of this farce, when the Commission invited reviews of its interim report, we resubmitted our original evidence as it was utterly clear from the document that they had taken no account of our original remarks. From the present recommendation, it is equally evident that they have once again ignored the views of Scotland's business community.
What evidence is there that an enforced sale at the bottom of the market in an encroaching recession would attract other than a cut-price operator who would set about undoing the years of careful investment? What traveller wants the stressful business of catching a flight added to by a downgrading of facilities? None I know of.
The Competition Commission's proposal to force BAA to sell one of its airports and to specify that Edinburgh's should be sold is unprecedented. It is surely a dangerous development that any competition authority can direct a company to divest any part of its business without providing a rational reason for doing so. What signal does it give to inward investors when an unelected commission can interfere in such a way without providing any sound justification? How does this assist economic recovery?
The business market in Scotland is absolutely clear that Aberdeen, Glasgow and Edinburgh airports serve distinct markets. The only reason that a commercial traveller would choose one over the other is if the flight they sought was not available from their nearest airport. The rumour that some London-based assessors considered Aberdeen and Edinburgh to be competing because they are both east coast and only 90 miles apart shows no understanding of local conditions and that critical factor – time to travel, not distance. Not surprising when the Commission didn't even bother to visit Scotland.
Almost two years on from the start of this inquiry, it remains unclear as to the problem the Commission believes would be solved through the sale of a Scottish airport. Additionally, the Commission is acting outside its remit. It is not the board of BAA. Its function is solely to determine whether a monopoly exists. If so, it is up to BAA how to remedy matters, not to be told which airports to sell.
BAA has invested unprecedented sums to improve the facilities for passengers (£150 million over the last ten years) and have published ambitious plans, including a £40m extension of Edinburgh's facilities. Through the BAA Scotland route development fund, we have seen a growth in routes that has transformed Scotland's connectivity with the world.
This is not a record to be taken lightly or a strategy that any new owner would be compelled to follow. In a time of economic uncertainty, why we would want to put this record at risk?
Graham Birse deputy chief executive of Edinburgh Chamber of Commerce
Source
THE recommendation of the Competition Commission that BAA be required to divest itself of Edinburgh Airport is a decision that beggars belief. First of all we need to ask why has the inquiry been run in the first place?
Not because there are queues of passengers complaining about facilities and service at this crucial gateway. One example of exceptional service would be the way that BAA responded to the security tightening by setting maximum transit times through security checks which considerably diminished delays at boarding. As any business should understand, if you don't take your customers seriously, you won't sustain your business.
The most obvious reason for disquiet is the pressure from airlines for low-cost airport facilities. The two opposing models for minimal infrastructure with a few perimeter sheds and that of an airport which makes a statement about capital city status are both defensible models. The former is obviously cheaper. The latter is what we currently aspire to, and the secondary argument that BAA has (as at Heathrow) "failed to invest in the airport" is so palpably untrue in Edinburgh's case as to encourage derision. The reality is that under BAA's stewardship of Edinburgh and Glasgow airports, aircraft charges have been reduced every year for 15 years, working towards the operators' goals.
We are utterly frustrated at the actual process of the Commission inquiry. As part of its lengthy proceedings into BAA airports, the Competition Commission has frequently asked for the views of stakeholders in Scotland. Time and time again, leading and respected organisations like the Edinburgh Chamber of Commerce have submitted their views. Yet, for whatever reason, the Commission has repeatedly chosen to ignore those views.
Lest you think I exaggerate the extent of this farce, when the Commission invited reviews of its interim report, we resubmitted our original evidence as it was utterly clear from the document that they had taken no account of our original remarks. From the present recommendation, it is equally evident that they have once again ignored the views of Scotland's business community.
What evidence is there that an enforced sale at the bottom of the market in an encroaching recession would attract other than a cut-price operator who would set about undoing the years of careful investment? What traveller wants the stressful business of catching a flight added to by a downgrading of facilities? None I know of.
The Competition Commission's proposal to force BAA to sell one of its airports and to specify that Edinburgh's should be sold is unprecedented. It is surely a dangerous development that any competition authority can direct a company to divest any part of its business without providing a rational reason for doing so. What signal does it give to inward investors when an unelected commission can interfere in such a way without providing any sound justification? How does this assist economic recovery?
The business market in Scotland is absolutely clear that Aberdeen, Glasgow and Edinburgh airports serve distinct markets. The only reason that a commercial traveller would choose one over the other is if the flight they sought was not available from their nearest airport. The rumour that some London-based assessors considered Aberdeen and Edinburgh to be competing because they are both east coast and only 90 miles apart shows no understanding of local conditions and that critical factor – time to travel, not distance. Not surprising when the Commission didn't even bother to visit Scotland.
Almost two years on from the start of this inquiry, it remains unclear as to the problem the Commission believes would be solved through the sale of a Scottish airport. Additionally, the Commission is acting outside its remit. It is not the board of BAA. Its function is solely to determine whether a monopoly exists. If so, it is up to BAA how to remedy matters, not to be told which airports to sell.
BAA has invested unprecedented sums to improve the facilities for passengers (£150 million over the last ten years) and have published ambitious plans, including a £40m extension of Edinburgh's facilities. Through the BAA Scotland route development fund, we have seen a growth in routes that has transformed Scotland's connectivity with the world.
This is not a record to be taken lightly or a strategy that any new owner would be compelled to follow. In a time of economic uncertainty, why we would want to put this record at risk?
Graham Birse deputy chief executive of Edinburgh Chamber of Commerce
Source
