The Competition Commission published a report on November 4 finding that British Airport Authority (BAA), which owns seven airports in the UK, has acted against the public interest in its management of Stansted Airport. The Commission investigated Stansted for six months at the request of the Civil Aviation Authority (CAA).

In its report, the Commission found that the airport failed to consult adequately with the airlines about its planned expansion, failed to manage the security waiting process, and overcharged cargo aircraft for landing. The Commission noted that it had received furious criticism about the quality of service at Stansted since 2002.

The Commission has investigated problems with British airports in the past, which it blames on a lack of competition in the ownership of airports. The Commission previously recommended that BAA should sell three of its airports to increase competition.

Ryanair, an airline that operates routes across Europe and North Africa, complained to the Commission about the costs of using the UK's airports, with Stansted as its main concern. Ryanair is grounding 15 airplanes at Stansted this winter because the airport's fee structure hurts the airline's profitability. In its report, the Commission did not agree with Ryanair that the airport's costs were excessive for airlines, and found that the airport had not operated against the public interest with regard to airport charges.

The report recommended that the CAA require BAA to take three actions: (1) improve the consultation process with the individual airlines; (2) introduce a service quality rebate scheme under which BAA will be forced to pay airlines for poor performance; and (3) offer off-peak discounts on landing charges for the largest cargo aircraft.

The Commission recognized that the introduction of extra security measures in 2006 caused problems, but still thought BAA did not do enough to meet the needs of its customers. CAA statistics show that 78 percent of flights from Stansted took off within 15 minutes of their scheduled departure time. The average delay was just under 15 minutes.

The Commission's report also recommended landing fees be set significantly below BAA's expectations. The Commission ruled that fees could rise from6.34 per passenger to7.05 over the next five years.

The BAA expressed disappointment in the Commission's report, claiming that the Commission had failed to reflect large elements of the cost in operating Stansted Airport over the next five years and beyond in its assessment.

The CAA will consider the recommendations before making its final decision in March 2009. It must decide on the five year price cap regime for Stansted, as well as imposing remedies in areas where BAA has acted against the public interest.