BAA AIRPORTS MARKET INQUIRY
Summary of meeting with the Car Rental Operators
held on 17 December 2007
The Car Rental Operators (‘CROs’) said that the car rental industry had, for quite a
number of years, had anxieties about its position and the patterns of conduct which it
felt itself exposed to.
In terms of car rental facilities, the CROs told us that a car rental counter was the first
facility a customer would see upon arrival at an airport. At Heathrow, for example, a
courtesy bus owned by the relevant car rental company would transfer the customer
to its facility, which was usually based on the perimeter road, inside the territory of
the airport. However, this was not the practice at every airport: at Gatwick, for
example, the car rental facility was within walking distance of the terminals. Once the
booking process was completed the customer would collect their hire car and leave
the car park. At the end of the rental period, the car would be returned, usually to the
same location. The car would be checked over and the customer billed. The car
would then go through a turnaround facility at which the vehicle would be valeted and
checked again for any maintenance needed. It would be refuelled and then brought
back to another bay for re-rental.
There were six or seven car hire operators at Heathrow and companies were
required to have on-airport operations in order to have a kiosk at the terminal. But
there were also other car hire companies that operated from outside Heathrow.
The CROs told us that BAA had a fixed five-year term for contracts and stipulated
their price and duration. There was no competitive bidding. The CROs effectively
paid BAA a percentage of what was described as concessionable revenue. This
revenue included all of the revenue that was received from the customer, less VAT
and fuel and was subject to a minimum annual guarantee.
BAA’s contracts with different companies were not transparent and although the
British Car Rental Association had a