OFT to launch market study into UK airports

109/06 30 June 2006

The OFT today announced that it is to study the UK airports market with a view to establishing whether the current market structure works well for consumers.

Download a short document outlining why UK airports meet the criteria for launching a study, and the focus and timescales of the study (pdf 109 kb).

The decision to proceed to a market study reflects the importance of airports to consumers and businesses within the UK. Nearly two thirds of UK air passengers begin or end their journey at BAA airports. Within the London area this rises to nine out of ten passengers, and in Scotland over eight out of ten air passengers fly from a BAA airport.

At this stage the OFT has not reached a decision on whether a reference for a more in-depth investigation by the Competition Commission is warranted.

OFT Chief Executive John Fingleton said:

'Greater competition between airlines over the past decade has led to wider choice for air travellers and lower fares. We now think it is time to explore the potential for greater competition within the airport industry as this could ultimately yield significant benefits in terms of timely and adequate investment in UK airports, a better value service to the UK travelling public as well as potentially relieving the industry - and ultimately its customers - of the costs of regulation that may be disproportionate.'

See UK airports market study page.

NOTES

1. UK airports are important to the UK economy - BAA latest turnover figures for UK airports are £1.7bn for 2005/6 - higher than the previous year's figures of £1.64bn. Its profits for the last reporting period were £660m.

2. Market studies are undertaken by the OFT under section 5 of the Enterprise Act 2002. Possible outcomes of a market study include:

giving the market a clean bill of health
publishing information to help consumers
encouraging firms to take voluntary action
encouraging a consumer code of practice
making recommendations to the Government or sector regulators
investigation and enforcement action against companies suspected breaching consumer or competition law
a market investigation reference to the Competition Commission.

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