BAA airports dominance investigated

Competition chiefs will today receive proposals about how much operator BAA can charge airlines at Heathrow and Gatwick airports…

Competition chiefs will today receive proposals about how much operator BAA can charge airlines at Heathrow and Gatwick airports.

The plans, sent by the Civil Aviation Authority (CAA) to the Competition Commission, could result in BAA being able to charge less for the period 2008-13 than it can now.

BAA has warned that an unfavourable price-capping regime could harm its future investment plans at Heathrow.

These include the £1.5 billion Heathrow East project, which will see a terminal built by 2012 to replace the existing Terminals 1 and 2 at the west London airport.

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Outlining its proposals last December, the CAA said there was scope for BAA "to improve both its operating cost and commercial revenue performance".

The Competition Commission is expected to spend six months looking at the CAA proposals, with the CAA making a final ruling early next year in time for the new five-year charging regime to start in April 2008.

Another submission to the Competition Commission about BAA - from the Office of Fair Trading (OFT) - is due shortly.

The OFT began an investigation last year into UK airports and said in December 2006 that it suspected the ownership by BAA of its airports, the system of economic regulation of airports, and capacity constraints combined to prevent, restrict or distort competition.