16.10.05
Exeter Airport based airline Flybe has dealt a blow to Bristol Airport owner South West Airports Consortium (SWAC)'s plans to buy the airport by calling for the group to 'gracefully withdraw' its bid.
The low-cost airline - the biggest operator at Exeter airport - believes it would be in the region's best economic and consumer interests if SWAC pulled out. The news continues a difficult week for SWAC and the airport's owner Devon Country Council, coming just days after the Office of Fair Trading (OFT) announced it was referring the issue to the Competition Commission.
The commission will address fears that any sale to SWAC - the council's preferred bidder and a major shareholder in Bristol Airport - will mean Exeter is treated as a secondary flight centre attracting less lucrative routes and offering a poorer all-round service than its bigger neighbour.
Flybe's chief commercial officer, Mike Rutter, has said that it is time for a fresh start for both SWAC and the council. 'We believe that it is against the consumer interests for airports of broadly similar catchment areas to be owned by the same body,' he said.
'If they are owned by the same group, inevitably what will take place is a reduction in competition between the two areas. Therefore there will be an increase in costs and an increase in consumer prices and consumer choice of destinations.'
'We believe that it should be a matter of Government policy, in the best interests of the UK economy, that they seek to have competing airports within adjacent catchment areas.'
Rutter said SWAC - a partnership between Australia's Macquarie Airports Group (MAG) and Spain's Ferrovial Group - was a 'fine organisation' which has done many positive things in the region. But he added: 'We have expressed our concerns to SWAC over many months. In the interests of the South West economy and the best interests of everybody in the South West, they should gracefully withdraw.'
'Devon County Council also have the complete ability to be able to now withdraw from the process and to reopen it to other players. In the best interests of the South West economy we believe they should seek to do that.'
Rutter said that a Competition Commission inquiry in 1995 into the proposed purchase of Belfast City Airport by Belfast International Airport, saw the body taking the view that competing airports should have different owners. 'We believe that is a fairly important precedent and one that is likely to be followed in this particular case,' he said.
In referring the issue earlier this week, the OFT said the deal raised concerns about the loss of competition, which could adversely effect passenger choice. MPs and business leaders had already voiced concerns that economic growth, new flight routes and development could all be stunted as a result of the takeover - claims which SWAC denies.
The commission does not have to report back until March 27, almost a year after SWAC was first announced as the preferred bidder for the airport. Following Flybe's comments, a SWAC spokesman said: 'We are considering our next steps but do not wish to make any further comment at this stage.'
A spokesman for Devon County Council said: 'The county council notes the announcement by the OFT. Exeter International Airport is a terrific success story with the biggest rise in number of aircraft handled by a regional airport last year - up 45 percent and passenger numbers up by nearly a third in the first half of 2005.'
'The county council will continue to support the airport's success while pursuing the aim of securing the right kind of strategic investment in the company. We will take appropriate steps to ensure that aim is achieved.'
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