"BAA drive to cut airport queues as double investigation looms"

Wednesday, March 28, 2007

BAA drive to cut airport queues as double investigation looms 
By Michael Harrison
United Kingdom - The Independent


BAA, the owner of Heathrow, Gatwick and Stansted, responded last night to
severe criticisms of passenger delays at its UK airports by announcing plans
to hire an extra 1,400 security staff to cut waiting times. 

The move came as regulators prepared to pack BAA off to the Competition
Commission for a double investigation into airport charges and the case for
breaking up the company's monopoly over the three South-east airports.

Stephen Nelson, BAA's chief executive, said the £40m staff recruitment drive
would enable it to open 22 additional security lanes across its seven UK
airports. He said BAA had given the regulators a commitment to reduce
queuing at passenger and baggage scanning machines to five minutes or less
for 95 per cent of the time.

BAA was savagely criticised last year by a number of airlines, including
Ryanair, for the long delays at airports caused by the tighter security
restrictions imposed after the July terrorist alert at Heathrow. Michael
O'Leary, Ryanair's chief executive, claimed that on one occasion delays were
caused at Stansted airport not because of security curbs but because BAA
staff had called in sick to stay at home and watch a Tottenham Hotspur vs
Arsenal football match.

Mr Nelson said in return for increased security spending and investment in
new facilities, BAA's economic regulator, the Civil Aviation Authority, had
to give it proper incentives.

Mr Nelson said BAA needed to be able to increase passenger charges by an
average of £8 over the period 2008-13 to fund its investment programme. This
compares with the £4.50 increase that the CAA is proposing to allow.
"Putting BAA in the dock for a complex set of problems - with deep legacy
causes - will not help solve them," he said. "We are ready to deliver on our
strategic commitments. We must now look to the regulatory authorities to
deliver on theirs."

The CAA's proposed five-year price control, which will cut BAA's return on
capital at Heathrow to between 5.9 and 6.2 per cent, will be formally
referred to the Competition Commission on Friday. The referral of its
South-east monopoly by the Office of Fair Trading could come as early as
today or tomorrow after BAA rejected the option of voluntarily selling one
of its airports.

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