Heathrow State BAA takeover plans
HEATHROW Airport could be taken under State control under emergency powers designed to protect passengers from the financial woes of operator BAA.
Transport Secretary Geoff Hoon has drawn up plans to place Heathrow in a “special administration” regime if debt-laden BAA went bust.
The regime would require administrators to continue to operate Heathrow as an airport while its financial affairs were sorted out.
It would also give Hoon and the Civil Aviation Authority a direct say in the future ownership of the airport. Similar emergency powers are held for the rail and water firms.
Ministers fear that in the normal insolvency regime receivers would have no duty to continue services to passengers and could even decide to sell off parts of the airport for housing or industrial use.
The new powers would also apply to Gatwick and Stansted, but Hoon appears particularly concerned about the impact on the wider economy of financial problems at Heathrow.
A Department for Transport consultation paper states that closing Heathrow for even a week would disrupt the travel plans of one million passengers.
It adds: “This would be potentially very damaging for those involved as trips would have to be cancelled and business meetings missed.”
Sources at BAA described the move as “unhelpful” and insisted that the company’s financial position was sound.
The move is also opposed by the Civil Aviation Authority, which regulates airports, but the DfT states: “On balance we take the view that the potential negative impacts of the financial failure of a large airport, in particular Heathrow, would be sufficiently large to warrant the introduction of special administration, providing implementation costs are not excessive.”
The DfT acknowledges that the new regime “may have an impact on airports’ existing financing arrangements”, as the prospect of State interference could put some investors off.
BAA is being forced to sell Gatwick, Stansted and either Glasgow or Edinburgh airports on competition grounds.
In the three months to March 31 the group posted a £316.2 million pre-tax loss as passenger numbers slumped 10 per cent.
A spokesman for BAA said: “It is extremely unlikely that these special administration powers would ever be required. Heathrow is a robust business and our financing is secure.”
BAA was bought by the Spanish company Ferrovial three years ago in a deal that saddled it with debts of £9.5 billion.
