BAA set for break-up

By John Bowker

LONDON (Reuters) - Airports operator BAA is expected to be told on Wednesday that it must sell at least one of its seven airports, breaking up a monopoly that has stood for more than 40 years.

The firm, owned by Spanish group Ferrovial, is being investigated by the Competition Commission, which publishes its "provisional findings" document at 7 a.m.

The regulator is widely expected to recommend a break-up after a preliminary study in April found that under a single owner there was no competition among some of its airports.

BAA, formed in 1965, owns the London trio of Heathrow, Gatwick and Stansted airports plus Southampton and three Scottish airports.

Its owner Ferrovial has come under fire from politicians and airline bosses for long queues and poor service at Heathrow and Gatwick in the past two years, culminating in the bungled opening of Heathrow's Terminal 5.

"We anticipate the review will propose a range of options, including a break up of BAA's monopoly," Collins Stewart transport analyst Andrew Fitchie said in a note.

Tougher regulation as called for by airlines including British Airways and easyJet could also be included, Fitchie said.

BAA Chairman Nigel Rudd told the BBC at the weekend he expected the review to recommend disposals and that it would not be a disaster of the company had to sell some assets.