Ferrovial told to sell British airports

By John Bowker

LONDON (Reuters) - Spain's Ferrovial was served with a two-year deadline to sell three of its seven British airports, though a regulator said the timeframe might be reviewed as the debt-laden company threatened to appeal.

The firm, which bought Britain's airports monopoly BAA for more than 10 billion pounds at the top of the market in 2006, must now sell London's Stansted, followed by either Edinburgh or Glasgow, in a recession.

Those sales will only be able to go ahead once it has completed the auction of Gatwick, which was put on the block last year. BAA owns Heathrow, Gatwick and Stansted -- London's three busiest airports -- as well as Edinburgh, Glasgow, Aberdeen and Southampton.

The Competition Commission delivered the ruling in a final report published on Thursday. It said separate ownership of Britain's airports, particularly in the London area, would benefit both passengers and airlines in terms of lower prices and more beneficial investment.

BAA CEO Colin Matthews told Reuters the group would spend the next two months considering the ruling, but warned it would challenge the order if it considered it impractical to sell the assets in the current harsh economic climate.

"Selling one airport is one thing, selling three is another. You can't assume we will appeal ... but we might have to if we reach the conclusion that it is simply not practical to proceed," he told Reuters Insider financial television.

Ashley Steel, head of transport and infrastructure at accountants KPMG, said the antitrust regulator has set the company a "quite alarming" timetable.

Matthews added that he considered the Competition Commission analysis flawed, and that Heathrow competed with airports in other countries and not with Gatwick or Stansted.