The Competition Commission has suggested, perhaps commanded (I no longer know what sort of power the CC has given that most competition issues are meant to be dealt with on a Europe-wide basis) that BAA ought to sell some of its airports, and in particular two of the three main London ones. I am uneasy about this for two main reasons...

First off I am deeply suspicious about the timing of the Competition Commission's investigation which seemed to be a (possibly coincidental) reaction to those foreigners (Ferrovial) taking over a British company which had owned those airports for a significant time. If there was a problem with monopoly, surely it should have been taken into account when BAA was first privatised.

And second it is a big step to try and force someone to divest themselves of their own property, especially when it's not as if they are "absentee landlords" but working, and presumably working quite successfully (other than the debt burden) the property.

But there is another problem. The monopoly is not really about the airports themselves - and indeed making them compete directly by being owned by separate owners wanting to maximise their income from each individual airport is likely I would have thought to result in heavier use of all of them, increasing the discomfort for the folk who have to live as neighbours of these smelly, filthy, noisy facilities.

It is exacerbated by the fact that what they really control is access to the airlanes that supply those airports. Airlanes that are, in the economic sense, "land" - part of "unimproved" natural resources with finite space - and in this case also time - (though of course safety technologies can increase the capacity a little) for all the potential users. This is part of the commons, and Ferrovial/BAA and the longer established airlines profit directly from the monopolistic enclosure of those airlanes.

Like the Electromagnetic Spectrum they are part of the "commons" and should be leased at their full economic rent from the state for our collective benefit. They are most commonly called "landing slots" and are worth a huge amount of money - Deloittes reckons that peak day time slots at Heathrow are worth up to £30 million per pair in summer, and there are 9,562 (4,781 pairs - one to land and one to take off on) per week in high season, with an overall limit of 480,000 per year at the moment.

The slot situation is currently, by common consent, pretty chaotic. The government has capped the amount BAA can charge and capped the amount by which it can increase the charge, but 97% of all slots at Heathrow for example are not open to effective competition as they are sold at this capped cost to airlines who have been there the longest, so called "grandfather rights". Heathrow is the only airport in Europe at which there is a significant amount of secondary trading in a "grey" market which is where the £30 million per pair arises. All this profit, the economic rent, goes to the airlines and Deloittes goes on to calculate that BA's slot portfolio may be worth up to £2bn if it were included in its balance sheet as an asset compared with its market capitalisation of around £2.7bn!

The CAA should be auctioning airspace rights to all airports at whatever the market will pay, whilst airports themselves should be responsible for charging the airlines for the use of the "improvements" - the terminal access, ground facilities and so on.

This would force traffic that doesn't actually need to use these massively oversubscribed London airports out to existing regional airports first, often reducing travel times - why travel from Lancaster to London to get a plane if the destination you want is available more cheaply from Manchester - as well as bringing increased economic activity to the areas around those regional airports - airports are a huge draw for international businesses. And unless the overall capacity of slots convenient for travelers' points of origin and destination is actually more than required, would generate a goodly sum for the government in a more market efficient way than say fuel taxes.

I hope we will be having a debate at South Central regional conference on Heathrow's third runway proposals. I believe the rigorous eradicating of this money for nothing monopoly on the part of the airports and airlines through nationwide slot auctions would actually obviate the need for the extra imposition this third runway would cause on teh surrounding areas without affecting overall the competitiveness of Heathrow for flights that really need to use it.