The company that owns Heathrow, Gatwick and Stansted airports faces being broken up following a damning official report today.
BAA, which has enjoyed a near monopoly over flights in London and the South-East for two decades, is heavily criticised for high prices and providing dismal service for millions of long suffering passengers.
The report, from the Office of Fair Trading, could lead to BAA having to sell Heathrow, Gatwick or Stansted to a rival to increase competition.
Currently about nine out of 10 air passengers in the South-East use one of BAA's three airports, which were privatised in 1987.
OFT chief executive John Fingleton said: "We believe that the current market structure does not deliver best value for air travellers in the UK and that greater competition within the industry could bring significant benefits for passengers. There is evidence of poor quality and high charges.
"There are signs of a market not working well for consumers and we believe a full inquiry into BAA's structure is justified."
The OFT found evidence that:
Passengers pay more than they need to for their tickets because BAA is charging the airlines that use its airports too much to land and take off.
The report found that lack of competition in the South-East "leads to higher charges than would be the case if these airports were owned by separate firms".
Services and passenger facilities at Heathrow and Gatwick South terminal are "poor". For example there is not enough seating, travelators are often broken
and roofs leak. The report quoted a recent international passenger survey that ranked Gatwick 49th and Heathrow 56th out of 58 major airports round the world for "overall satisfaction".
Passengers face lengthy queues at security control because of lack of staff. The report also looked at claims that BAA responded badly to the August security alert, which crippled London's airports when new security measures were introduced. Many airlines complained about BAA's response and said Manchester, which is operated by a different company, handled the crisis much better. However, the report said it was not possible to be sure whether BAA was "culpable".
BAA, which was bought by Ferrovial of Spain this year for Pounds 9.5 billion, will now be subject to a full inquiry by the Competition Commission. If its officials agree with the OFT, BAA is likely to be broken up.
Airlines welcomed the decision and said the dominance of BAA, which made a pre-tax profit of Pounds 757 million last year, invited "abuse".
In a statement BA said: "Effective regulation is the key to preventing abuse of monopoly power, especially at Heathrow and Gatwick. Separate ownership of Heathrow and Stansted would ensure decisions about new runways in South-East England are not concentrated in hands of one company."
Ryanair's chief executive, Michael O'Leary, said: "Ryanair has long called for a break-up of the BAA monopoly.
Heathrow is a shambles, which most passengers if they could, would avoid.
"Equally, Stansted is an over-specified, gold-plated Taj Mahal. The present ineffective regulatory regime operated by the Civil Aviation Authority encourages the BAA monopoly to waste Pounds 4 billion building a second runway and terminal at Stansted, when these facilities could easily be built for less than one quarter of this figure."
ANNUAL TRAFFIC LEVELS
Heathrow 67.7 40,207 19 mins 56 Gatwick 32.7 24,411 28 mins 49 Stansted 22 18,161 20 mins 43 Passengers (million) Number of flights Average delays Satisfaction (out of 58) L
On your marks for lower emissions RACETRACK-style starting grids for passenger planes are being tested at Heathrow and Gatwick in a bid to reduce emissions.
The scheme, developed by Virgin Atlantic, uses a holding area close to the runway consisting of several parking bays for aircraft. It means that planes can be towed closer to a runway before takeoff, reducing the time their engines need to be running.
>"There are signs of a market not working well for consumers and we believe a full inquiry into BAA's structure is justified."
The Competition Commission is looking into BAA's ownership of seven major airports, including Heathrow.
The announcement sets the company on a collision course with regulators and means that BAA is certain to be referred to the Competition Commission.
How to end the 'Heathrow hassle' BAA's monopoly on the capital's three main airports means that it has become complacent, writes Russell Hotten
IT IS difficult to think of another company with so many dissatisfied customers. More than 70m passengers have passed through Heathrow Airport in the past 12 months and it seems a reasonable bet...