'Shambolic' BAA forced to sell Gatwick, Stansted and a Scottish airport as watchdog orders end of monopoly

The Competition Commission said Spanish-owned BAA's near-monopoly of major UK airports had led to plunging standards. Breaking it up would be in the public interest.

The watchdog said BAA should sell off two of its three London airports  -  it also owns Heathrow  -  along with either Edinburgh or Glasgow.

No deal: BAA have insisted they will hang on to Heathrow

The scale of the proposals, and the humiliating criticism of BAA's poor management and chronic under-investment, delighted the company's many critics.

Passenger groups said the proposals were much needed.

Airlines which have battled with BAA over lack of capacity and high charges called them a 'major victory for passengers'.

But BAA, which also owns Southampton and Aberdeen airports, described the findings as disproportionate and flawed and warned that customer service could suffer.

The former British Airports Authority, now owned by Spanish company Ferrovial, has been fiercely criticised over the performance of its airports, particularly Heathrow.

The disastrous opening of Terminal Five this year led to hundreds of cancelled flights, and tens of thousands of passengers lost their luggage.

Target: A passenger jet landing at BAA's Gatwick airport in West Sussex

In a preliminary report, Christopher Clarke, chairman of the Competition Commission's BAA inquiry, said many failures of the last few years had been caused by the lack of competition between the London airports.

This had led to a lack of investment in runway capacity, poor customer service and a failure to spend money on 'essential operation processes'.

Mr Clarke accused BAA of a 'lack of responsiveness' to customers and blamed it for the lack of runway and terminal capacity in South-East England.

Poor service: Passengers at Gatwick Airport

The Commission called on the Civil Aviation Authority to impose tough customer service standards for passengers.

Heathrow has one of the worst records in the world for delays. In the first three months of 2008, 44 per cent of its flights were at least 15 minutes late and the average delay was 25 minutes.

The commission report cited an international survey of 'overall airport experience' by the Airports Council International.

Of the 101 airports that were examined, Heathrow was ranked 90th, Gatwick 75th and Stansted 74th.

BAA chief executive Colin Matthews said he accepted the report's concerns about poor service. He refused to comment on the future of Gatwick or Stansted but said BAA had 'no intention of selling Heathrow', its most profitable airport.

Mr Matthews added: 'We will continue to point out to the commission the many areas where we believe its analysis is flawed and its remedies would be disproportionate and counter-productive.'

Tory transport spokesman Theresa Villiers welcomed the report. 'For many months we have been calling for BAA to be broken up,' she said.

'Too often they have provided their customers with dismal levels of service. We want passengers and airlines to be able to vote with their feet.'

Airlines were also in favour of the break-up proposal.

Virgin Atlantic Airways said: 'This is a major victory for passengers. The BAA monopoly at UK airports has failed to give travellers and airlines the world-class facilities they have deserved for so long.

'Monopolies never work in the consumer's interest so it is encouraging that the commission wants to break up BAA.'

James Fremantle, of the Air Transport Users Council, said: 'These are serious failures at Heathrow and other BAA-owned airports and we are pleased something is being done about them.'

The British Airports Authority was created by Harold Wilson's Labour government in 1966 to run Heathrow, Gatwick, Stansted and Prestwick airports.

When it was privatised in 1987, it was allowed to keep its monopoly over London's three main airports, with the then Tory Government arguing that a single, powerful owner was the best way to increase airport capacity.

Two years ago BAA was taken over by the Spanish Ferrovial group, which owns car parks, airports and toll roads in more than 40 countries.

The Competition Commission findings are provisional and will be challenged by BAA, but the watchdog has the power to force the company to sell its airports. A final decision will be made in April.