This causes me some difficulty. I am not usually in favour of enforced competition (warning: short). But there does seem to be a problem here. Usually when there is a market failure it turns out that it is in fact a cunningly disguised government failure. The railways are a good example of this.
But, if so, what has the government done to produce this fiasco? I suspect the answer lies in planning (again), in that if you wanted to go into competition with BAA you’d have to spend the rest of your life just getting the planning permission. But I am not sure.
Any other suggestions?
* Does BAA still stand for British Airports Authority?
Update. It seems that it doesn’t. It’s one of those acronyms that has outgrown its constituent words and taken on a life of its own.
Version 2 of this posting is now available.