Bad deal for the Spanish but they deserve some sympathy

When Spanish construction firm Ferrovial spent £15 billion buying up BAA, it patently had no idea it was walking into financial, operational and regulatory firestorms. The global credit crisis meant it spent two years trying to get the money it borrowed rescheduled on better terms.

Operationally, BAA became a scandal. It failed to deal with tightened security rules or manage Heathrow's horrendous congestion. Worse, the opening of Terminal 5 at Heathrow was a catastrophe.

But you have to have a little sympathy over Ferrovial's dust-up with Britain's competition regulators. As it was signing the deal in 2006, the Office of Fair Trading and then the Competition Commission were launching an investigation into whether BAA's 92% control of the London air travel market was anti-competitive.

Of course it was, is and has been since the company was privatised two decades ago. But a succession of Transport Secretaries ruled the Government was comfortable with the situation. For the regulators then to order BAA's break-up when the only thing that has changed is that it is now foreign-owned looks, well just a little un-British, and jolly poor luck for the Spanish. A year from now, Heathrow, Gatwick and Stansted are all likely to be separately (and probably foreign) owned. What does this mean for the consumer?

The theory is that the break-up of a lazy monopoly means customer service improvements. The counter-theory is that the three airports do not compete with each other, and are simply local monopolies serving discrete business, long-haul, holiday, budget and domestic markets.

The word is the three airports will continue to be separately regulated by the Civil Aviation Authority - another layer of cost for airports that have lost the financial benefits of being part of a larger entity.