The Supply of Airport Services by BAA
10 May 2010 12:58 PM
Notice of Acceptance of Final Undertakings pusuant to Section 159 and Schedule 10 of the Enterprise Act 2002
On 29 March 2007 the Office of Fair Trading made a reference to the Competition Commission (CC) under section 131 of the Enterprise Act 2002 (the Act) concerning the supply of airport services by BAA in the United Kingdom.
The CC published its report titled BAA airports market investigation: A report on the supply of airport services by BAA in the UK on 19 March 2009 (the Report).
In the Report, the CC concluded that:
(a) there are a number of features of the markets for airport services supplied by BAA, which each (and, in certain circumstances, in combination) prevent, restrict or distort compe-tition, and thereby have an adverse effect on competition (AEC) between airports and airlines; (i) paragraph 5.42 set out the finding that Aberdeen’s comparatively isolated geographical position, combined with other general factors that deter entry, are features that restrict airport competition and therefore give rise to an AEC;
(b) the CC should take action to remedy, mitigate or prevent the AECs and detrimental effects flowing from them and to that end undertakings should be given to give effect to the CC’s decision on remedies specified in the Report; (i) paragraph 10.215(a) concluded that the CC should require undertakings from BAA comprising a requirement to publish audited accounts and segmental analysis on a depreciated replacement cost basis for Aberdeen together with other relevant information as indicated in the Report; and
(ii) paragraph 10.215(b) concluded that the CC should require undertakings from BAA comprising, inter alia, a requirement to consult at least annually with airport users and other relevant stakeholders at Aberdeen regarding its expected capital expenditure programme. This would require the timely publication of information on the airport masterplan, a summary forward programme of capital projects together with forecast costs and details of individual key projects to the airlines and other interested parties and the creation of a forum for the proposals to be discussed.
In accordance with section 183(4)(d) of the Act the reference is not finally determined until the making of the last decision or the taking of the final action necessary to effect all of the CC’s decisions on remedies specified in the Report.
The CC published a notice of proposal to accept Final Undertakings on 24 September 2009. In accordance with the Enterprise Act 2002, all representations made during the minimum 15 day statutory consultation period have been considered. Non-material modifications have been made to the Final Undertakings as a result of such representations and the Final Undertakings have been entered into in the form attached. The Final Undertakings shall come into force accordingly.
The Final Undertakings contain a requirement to publish a Consultation Protocol that has been approved by the CC. The Consultation Protocol has not been published as part of the Final Undertakings. Instead, the Final Undertakings contain a hyperlink to the Aberdeen Airport Limited website where the latest version of the Consultation Protocol will be published.
Undertakings accepted by the CC may be varied, superseded or released by the CC in accordance with section 159 of the Act.
Peter Freeman QC
Chairman
On behalf of the CC