BAA Break-up

I’m kinda undecided on the BAA break-up. The FT thinks it should definitely go ahead. But as a fairly strict libertarian, and therefore keen on economic freedom, I’ve always had a problem with monopoly break-up except in the most extreme of cases (and I’m not sure this qualifies).

Nevertheless, as my job now takes me onto an aeroplane more than I before, I’m curious and so I read the summary from the Competition Commission’s provisional report. I’m not sure I’m any the wiser, but there were some interesting facts and statistics embedded within:

It’s interesting that the Competition Commission makes lots of slights about poor service, lack of responsiveness to the market, high prices, and so on. This seems a bit unfair. I’ve often wondered how one can gauge the degree of monopoly exploitation fairly, partly there’s rarely an accurate enough free-market alternative implementation to compare it to. The theory does dictate that a monopoly might happen, given some of the stats above, but saying that there is one is a much bigger stretch. This does make me think that perhaps a bit more laissez-faire might go a long way in keeping things market fair - although, as I think they hint at, a bit less regulation would help even things out too.


@Richard, I couldn't find a definition in the report. Nevertheless, I think it's based on what people say they are doing. I've done a survey before at LHR (waiting in the security queue), and they asked me what they I was there for. Pretty sure that most airlines would struggle to carry 40% of business class travellers anyway.
Did they say how they defined "business travellers"? I hope it's something more sophisticated than "travelling in business class". Only civil servants and politicians routinely travel club these days!