Ferrovial's BAA must sell 3 airports

By John Bowker

LONDON (Reuters) - Spain's Ferrovial must sell three of the seven British airports it bought for 10 billion pounds two years ago under a tougher-than-expected ruling on Wednesday.

Two must be in London -- meaning Heathrow, Gatwick or Stansted -- and one in Scotland, said the Competition Commission, which will decide which ones go early next year.

The break-up is partly intended to speed up expansion of London airports including the building of new runways, but Ferrovial airports unit BAA boss Colin Matthews said: "The Commission risks delaying ...delivery of new runways and making better customer service less, not more, likely."

The move to seek new owners to better serve air passengers and airlines drew a sceptical response from sector analysts, a mixed reaction from airlines, and concern over job losses from Britain's biggest union.

Analysts said finding buyers would take time and was no guarantee of delivering expansion or better service.

The owners of Luton, a London airport which Ferrovial does not own, scrapped expansion plans last year.

"This is not good for the UK in any shape or form in the short term -- even airlines are saying it will not change anything to break up ownership," Collins Stewart transport analyst Andrew Fitchie told Reuters.

British Airways and budget carrier easyJet both said a change of ownership was less important than improving regulation over owners.