BAA is being urged to sell three of its seven airports because of concerns about its dominance in the market.

The Competition Commission (CC) is recommending that the airport operator should have to sell two of its three airports in the south east: Heathrow, Gatwick and Stansted.

The Commission also believes that BAA should not be permitted to own airports in both Glasgow and Edinburgh.

However, BAA hit back saying it has "no intention" of selling Heathrow, its largest airport.

In a statement, the Commission said: "We have provisionally found that there are competition problems at each of BAA's seven airports with adverse consequences for passengers and airlines.

"A principal cause is their common ownership by BAA."

BAA, formed in 1965, owned by Ferrovial, owns the London trio of airports, three in Scotland, and one in Southampton.

BAA handles 91% of passengers in southeast England, where overcrowding and the chaotic opening of Terminal 5 at Heathrow led UK Ministers to demand its break-up.

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The CC is now seeking views on which of BAA's three London airports should be sold and similarly which of Edinburgh or Glasgow airports should be sold.

If Gatwick and Stansted are sold, the commission said they should be owned separately in the future to promote competition.

The CC said that BAA showed a "lack of responsiveness" to the needs of airlines and a "lack of initiative" over expanding capacity.

Christopher Clarke, who lead the inquiry said "unless the market is opened to competition, there is a serious risk that the current capacity constraints will persist".

BAA's Chief Executive Colin Matthews said he the report's concerns about "poor service" but declined to comment on the future of individual airports.

"We will continue to point out to the commission the many areas where we believe its analysis is flawed and its remedies would be disproportionate and counter-productive," he said.

The CC concluded: "The significant problems in the BAA airports market will not be solved overnight and changes in ownership would only be a first step in freeing up the market and providing greater scope for more flexible development."

Easyjet Chief Executive Andrew Harrison said: "We are very pleased that the Competition has recognised what is a fundamental problem for UK airports."

Ryanair Holdings Plc, Europe's biggest discount carrier, said by e-mail today that BAA was an "abusive monopoly" and that a break-up would bring "better facilities and lower prices".

The Commission's ruling is likely to be rubber-stamped by the Commission in a final report due early next year.

Bloomberg has reported that bidders for Gatwick may include Aeroports de Paris and Australia's Macquarie Airports, as well as Spanish Abertis Infraestructuras SA.

See: BAA Bids Begin

(DS)