Kelly announces BAA review

Tuesday, 22, Apr 2008 12:00

Transport secretary Ruth Kelly has announced plans to review the economic regulation of the UK airport system.

Plans for the review follow the publication of an interim report on the issue from the Competition Commission (CC), which says there is "potential" to develop greater competition.

At present BAA controls seven of the UK's airports, including the three London airports, and Ms Kelly acknowledge today the CC needs to review the current regulatory system to help improve scarce capacity in the south-east.

"The industry has seen significant change in recent years with our more global economy increasing the need for international movement of people and goods; and greater airspace liberalisation allowing passengers to benefit from more choice of flight destinations at lower prices, which has opened up opportunities that for many simply did not exist before," she said.

"But this progress does not come without challenges, not least the economic constraints created by a lack of airport capacity in the UK and the global impacts of climate change."

Ms Kelly explained the Airports Act 1986 needed to be "updated to reflect today's realities".

"In particular, this work will look at how best to provide incentives to improve the passenger experience; encourage appropriate and timely investment in additional capacity to help deliver economic growth in line with wider government policy; [and] address the wider environmental impacts of aviation on airport development," she added.