easyJet response to proposed Gatwick sell-off

The announcement this morning that BAA has put London Gatwick Airport up for sale is not a surprise, but it is a possible cause for alarm.

easyJet, Gatwick’s largest airline, has always argued that simply breaking-up BAA will do nothing to improve competition, and therefore the experience for the traveling public, unless three fundamental factors are recognised:

• Gatwick is a local monopoly and simply selling Gatwick to the highest bidder won’t change that fact. Monopoly providers of nationally-important infrastructure always need to be regulated to prevent irresponsible price gouging.

• 95% of the £10 billion that Ferrovial paid to buy BAA in 2006 was borrowed and the Spanish company has struggled to refinances large swathes of its debt in the last few months. Selling Gatwick is Ferrovial’s way of reducing its debt burden – but it means that UK airport policy is being dictated not by the Government but by the short-term financial constraints of a highly-indebted foreign owner. Such a situation cannot be allowed to be repeated.

• The Spanish company has persuaded the UK Civil Aviation Authority to allow it to increase prices by around 50% over the coming five years at Gatwick. This seems highly generous that there are no runways or terminals being planned or built at the airport. easyJet is challenging this decision through a Judicial Review.

easyJet calls on the Department for Transport to ensure that its proposed reform of UK airport regulation serves the country better than the existing system and puts the needs of customers first - not airport owners.