BAA needs to sell one of its airports to cater to regulators as well as its alarming debt situation
ou would have heard for sure that one can have too much of a good thing. But rare are occasions for a company when good and bad can both mean ugly, which explains the quagmire faced by Spanish construction behemoth Grupo Ferrovial, ever since it took the plunge to acquire British airport operator BAA for $19 billion.
First the good thing. In BAA, Grupo Ferrovial has really struck gold in UK, as the operator owns seven airports in the UK, which also include Heathrow, Gatwick and Stansted, but landed itself headlong in a quicksand of conspiracy, as BAA is being investigated by the UK’s Competition Commission over market dominance, which might result in compelling BAA to sell one of its airports. When the Civil Aviation Authority announced that landing charges would be hiked at Heathrow by 23.5% this year and by 21% at Gatwick, players have immediately cried foul. A release by British Airways comments, “to allow BAA to ramp up airport charges significantly demonstrates conclusively that the airport regulation system has failed.” Surely the fireworks have just begun there!
ou would have heard for sure that one can have too much of a good thing. But rare are occasions for a company when good and bad can both mean ugly, which explains the quagmire faced by Spanish construction behemoth Grupo Ferrovial, ever since it took the plunge to acquire British airport operator BAA for $19 billion.
First the good thing. In BAA, Grupo Ferrovial has really struck gold in UK, as the operator owns seven airports in the UK, which also include Heathrow, Gatwick and Stansted, but landed itself headlong in a quicksand of conspiracy, as BAA is being investigated by the UK’s Competition Commission over market dominance, which might result in compelling BAA to sell one of its airports. When the Civil Aviation Authority announced that landing charges would be hiked at Heathrow by 23.5% this year and by 21% at Gatwick, players have immediately cried foul. A release by British Airways comments, “to allow BAA to ramp up airport charges significantly demonstrates conclusively that the airport regulation system has failed.” Surely the fireworks have just begun there!
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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