Scottish business leaders fiercely oppose the Competition Commission forcing BAA to sell Edinburgh airport, despite it potentially saving £180million in ten years. The stance of the Scottish Chambers of Commerce and the Scottish Council for Development and Industry is extremely odd because normally business organisations are in favour of competition. Not in this case, however.

The sale of Edinburgh, leaving BAA with Glasgow and Aberdeen airports, is necessary, the commission reckons, because BAA has a near monopoly, handling 80 per cent of Scottish air passengers. Lack of competition means that customers are being overcharged by between £7million and £18million a year, hence the need for a forced sale.

Scottish business organisations have two arguments against this. First, they believe BAA's argument that Glasgow and Edinburgh serve separate markets. Data gathered by the commission shows that only about 5 per cent of Glasgow airport passengers come from the East of Scotland, while only 4 per cent of Edinburgh airport passengers come from the West. Thus, the argument goes, even if the airports had different owners,

they still would not compete.

However, Prestwick airport, which is owned by Infratil, which does compete vigorously and is nearly twice as far away from Edinburgh as is Glasgow, gets

21 per cent of its passengers from the East coast, proving that people will travel to different airports to get the flights that they want.

The second business argument is that an enforced sale of Edinburgh will so load the buyer with debt that it will be unable to finance any expansion and thus services will, in the longer run, become poorer.

BAA says that its investment programme is £540million for the three airports over the next ten years. But if that is so, how come BAA is able to afford this? It, after all, was bought by Ferrovial of Spain for £10billion in 2006 and, in order to finance the deal, Ferrovial added £6.6 billion of debt to BAA's existing debt pile of £6billion.

There is absolutely no reason to suppose that a new owner of Edinburgh would not invest to improve facilities and services, because otherwise it would lose traffic to Glasgow, which would still be in the hands of a debt-reduced and suddenly competing BAA.

The clinching argument is that the charges BAA levies on airlines at Glasgow and Edinburgh started falling only after Prestwick had a new lease of life in 1992 and aggressively sought to win airline business. All of a sudden BAA's charges came down, rather faster at Glasgow, which is close to Prestwick, than at Edinburgh.

The expected cuts in airline charges that would result from more competition is where the commission gets its estimate of £180million savings, money that it believes will be passed on the passengers through cheaper fares. It is a deal that Scottish business cannot afford to miss.

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