BAA will almost certainly be forced to sell three of its UK airports, including Gatwick and Stansted, following a provisional report today by the Competition Commission (CC).
The commission confirmed that, subject to final consultation, it would require the Spanish-owned airport operator to sell Gatwick in West Sussex and Stansted in Essex, as well as Edinburgh Airport.
The watchdog, which will publish a final report in the next few weeks, said it also proposed to introduce measures to ensure investment and services levels at Heathrow improved for airlines and passengers.
BAA, which has been under fire for many months for poor performance, runs seven UK airports, including Heathrow.
Christopher Clarke, who is chairing the commission's inquiry into BAA airports, said separate ownership of the three main London airports and the two main Scottish ones was the most effective way to introduce competition in south east England and lowland Scotland.
Mr Clarke went on: "Under the common ownership of BAA, there is no competition. Under separate ownership, the airport operators, including BAA, will have a much greater incentive to be far more responsive to their customers, both airlines and passengers."
BAA also runs Southampton, Glasgow and Aberdeen Airports. At Aberdeen, the CC said today that it was proposing measures to promote investment linked to rebates on charges.
The CC also intends to make recommendations to the Government on a more effective, and ultimately more flexible, system of airport regulation and also on aspects of Government airports policy.
As far as airport policy is concerned, the CC said the Department for Transport should "give consideration to the ambitions of the new owner of Gatwick Airport, including the possibility of a second runway after 2019".
The CC will now consider responses to its provisional decision document published today. It expects to publish its final report on BAA's seven UK airports, and the appropriate remedies, in late February or early March 2009.
BAA chief executive Colin Matthews said today: "As we said when the Competition Commission published its provisional findings in August, we do not believe that it has set out compelling evidence to support its view that selling Stansted as well as Gatwick will increase competition and we remain concerned that its proposed remedies may actually delay the introduction of new runway capacity.
"In Scotland, the commission has not provided any substantial evidence to support its view that Edinburgh and Glasgow would compete under separate ownership, and we believe there is no justification for specifying which of these airports should be sold. We will continue to make our case to the CC."
Agencies