Airports review may boost Tees

Apr 24 2008 by zzgn3deploy, Evening Gazette

THE owner of Durham Tees Valley Airport said it did not rule out bidding for one of London’s gateways if a Competition Commission ruling forces BAA to break up its UK portfolio.

Gatwick, which has no flights to Durham Tees Valley, and BAA’s Scottish terminals are widely tipped to be in the Commissioners’ sites.

Neil Pakey, deputy chief executive office of Peel Airports, which is investing heavily in improvements at Durham Tees Valley, said a shake-up could result in more operators capitalising on the “vast potential” of the North’s aviation network.

The Government has pledged to launch a review of the economic regulation of the UK's airport system after a report by the Competition Commission said operator BAA’s domination of airports in south-east England and parts of Scotland may be failing airlines and consumers.

Mr Pakey welcomed the review, saying Tees Valley would benefit from more competition between airport operators.

He said: “As we are the largest private sector UK-owned airports company, we are keeping a watching eye on the BAA situation. You would hope that a new operator would see the potential of air links to the North-east.”

But he said a change in operator at Southern airports would not necessarily have a material impact on traffic to Durham Tees Valley.

BAA has come under increasing pressure from politicians and airlines and is fighting off attempts to break up its control of UK airports. Owned by Spain’s Ferrovial, the company controls Heathrow, Gatwick, Stansted and Southampton in the south as well as Edinburgh, Glasgow and Aberdeen in Scotland.

Earlier this week the Competition Commission released a damning interim report which laid into BAA saying its ownership of seven UK airport was probably anti-competitive. The Government said it was ordering a review of the way the major airports were economically regulated, which would look at the charges BAA can impose on airlines for using Heathrow, Gatwick and Stansted. Airport charges have a major impact on the viability of services from regional airports.

Transport Secretary Ruth Kelly added that the review would look at how to improve customer service, boost investment and deal with environmental concerns.

Meanwhile Mr Pakey criticised proposals to increase air passenger duty tax when a surge in low-cost airlines had already heaped pressure on airport operators’ margins.

He said: “Manchester and Liverpool have already lost their daily New York services because of the air passenger duty tax. Is it worth increasing the tax if it is going to bring overall damage to the UK economy?”