Analysis: the Baa Breakup

Let's be honest. BAA is not the world's favorite airport operator. Too many people have stood in too many queues for too long for it to have too many friends. So today's tough report from the Competition Commission, which wants the company stripped of three of its seven airports, will not provoke an outbreak of national weeping among the traveling public.

For the industry, the crucial issue is capacity and that means more runways. The commission reckons delivering enough capacity to meet expected growth in demand was the reason BAA was privatized as a single entity and further reckons it has failed that test. BAA accepts it needs to get better but is far from pleading guilty on all charges.

Will breaking it up deliver better results? In the short term no one is expecting a magic wand to be waved and the various versions of "Heathrow hassle" to disappear. Competition should mean more investment and better communication between operator and airlines who will be keen to press in turn for what their customers, passengers, want.

It won't however automatically solve the central issue. Heathrow, for example, runs at around 98% of its capacity. As a result a foggy dawn or a sudden heavy rain shower can cause delays which, because the system has no slack, will still be hurting passengers many hours later.

From the industry's point of view building more runways would increase capacity, allowing more slack into the system, limiting the impact of delays. But that would only work if the extra capacity was used to create a buffer, not simply to allow more planes to fly more often, simply replicating today's problems on an even bigger scale.

But do we want yet more of the south east of England to be concreted over?

There are those who reckon giving the UK a series of hassle-free airports, particularly around London, is vital for the economy. Those who live close to those airports or whose homes would be swallowed by their expansion beg to differ. The political tensions which have dogged airport policy for years will not be solved by breaking up BAA.

As easyJet chief executive, Andy Harrison, noted, individual airports are themselves monopolies. Aircraft cannot simply circle round over the south east, seeking bids for landing from rival airports - to say nothing of passengers wanting to return from whence they departed.

BAA may be part of the problem. It may be better if it is a smaller part of the solution. But practically, politically and environmentally, competition alone will not solve Britain's air traffic conundrum. Government, the commission and others are keen to see a more modern regime of airport regulation. In the end that may be the best solution to Britain's problem airports - whoever owns them.