THE ISSUE
BAA is ordered to dispose of some of its airports
Last week the Competition Commission published its long-awaited report into BAA, the Spanish-controlled group that owns seven UK airports, including the big London trio of Heathrow, Gatwick and Stansted. The watchdog concluded what airlines had been saying for years: common ownership has been bad for competition and has made passengers’ experience at airports worse. It said BAA should sell two of the three London airports – almost certainly Gatwick and Stansted - and either Glasgow or Edinburgh. “There is no magic bullet to make airports better, but unless you start to create a market where there is no market, you will never make progress,” said Christopher Clarke, the commission’s deputy chairman.

WHAT HAPPENS NEXT?
Buyers will line up to buy cash-rich assets
The big sell-off could come next year, although an expected appeal by BAA would delay it, perhaps by a year or more. There will be no shortage of potential buyers. In recent years big banks, backed by pension funds, have put together specialist infrastructure investment firms, any of which would be eager to get their hands on a UK airport. They are attracted by steady if unspectacular income streams from landing fees and the ever-growing number of shops at the airports. The report didn’t stop with BAA. It also lambasted government policy on airport expansion - saying it too could have affected competition and should be reviewed - and the Civil Aviation Authority, the airport regulator.

WILL IT AFFECT RUNWAY PLANS?
Review may put airport expansion on hold
The government decided to back new runways at Stansted and Heathrow in a 2003 white paper. The commission says that by choosing where and in what order they should be built - and by ruling out Gatwick for the time being - ministers impeded competition. By calling for a policy review, just when the government is expected finally to confirm the Heathrow plan, the commission could put things on hold. “Challenging this policy at a moment when crucial decisions on new runways at Stansted and Heathrow are imminent is a significant thing to do,” said Colin Matthews, left, chief executive of BAA. Environmental and local campaigners who have sought to block the new runways will be delighted at the prospect.

HOW ABOUT PASSENGERS?
Competition may lead to cheaper and better service
The theory is that, under different owners, airports will compete for traffic, which will produce a better and cheaper service for passengers. The new owners of Gatwick and Stansted will want to change the look and feel of the airports in order to break with the BAA past and will want quick wins in customer service. In the longer term, Stansted may choose to go for a cut-price new runway and terminal, perhaps one built by Ryanair or easyJet. For its part, BAA will want to keep passengers using Heathrow. There are already signs that the company is doing better. Terminal 5 at Heathrow, left, which had such a chaotic opening earlier in the year, is now running more smoothly.