BAA chief sees breakup

LONDON (Reuters) - The chairman of British Airports Authority (BAA) said on Saturday he expects the Competition Commission to recommend the breakup of the airport operator, but added that would not be a financial disaster.

"All the things that I'm hearing are that they are going to make those kind of recommendations," Nigel Rudd said in an interview with the BBC.

Asked what the financial impact of a breakup would be on BAA, which is owned by Spain's Ferrovial, he said: "I don't think...it would be a disaster."

BAA operates seven airports, including Heathrow, Gatwick and Stansted near London.

The Financial Times reported on Saturday that BAA faced the threat of being forced to sell two of its three London airports under plans to be published by the Competition Commission next week.

Quoting people familiar with the matter, the report said the Commission would also suggest other options to break BAA's grip through less severe asset disposals and tighter regulation. Another proposal would force BAA to sell either Glasgow or Edinburgh airport in Scotland, it said.

The BBC also reported that the competition watchdog's preliminary report would support breaking up BAA.

The Competition Commission is investigating whether problems faced by airline passengers throughout Britain, as highlighted by the recent botched opening of Heathrow's Terminal 5, are caused or exacerbated by BAA's monopoly.

In April, it said the operator may not be serving the interests of airlines or passengers best.