Read the full report on BAA from the Competition Commission

Read BAA's response to the Competition Commission's report

Anyone travelling through Heathrow and Gatwick could face years more misery after BAA, the airports’ owner, threatened to cut investment after failing to secure the passenger price increases that it was seeking.

The probability that BAA will speed up the sale of core assets, which may include Gatwick, also increased after the Competition Commission published its report into the airport operator’s future charges.

The commission is recommending that BAA be allowed to increase by 18 per cent the amount it levies on airlines for each passenger carried but that is not as much as BAA wanted.

Ferrovial, the Spanish construction company that bought BAA last year, was hoping for a larger increase in passenger duty to help it to pay off the enormous debt it took on to finance the purchase.

A reduction in that revenue is likely to reduce Ferrovial’s returns at a time when it is already struggling with interest payments of £820 million a year. The company is selling nonterminal property and the World Duty Free stores to cut the debt load.

Ferrovial is also trying to refinance up to £10 billion of debt but that could be jeopardised by the commission’s recommendation of lower charges.

Analysts said that this was likely to force it to sell even more assets, with Gatwick and Glasgow likely candidates.

The lower than hoped for passenger charges will also limit future investment in Heathrow, BAA said.

In its submission to the commission, BAA said that investment during the next five years could be as low as £500 million, which would effectively mean nothing new being done.

Plans are in place to rebuild Terminals 1 and 2 at Heathrow in time for the 2012 Olympics in London, but they could be scrapped.

Stephen Nelson, the chief executive of BAA, said: “We see little in the Competition Commission’s report which delivers the incentives to transform the airports.”

Reducing investment in Heathrow and Gatwick will mean the already cramped conditions at both airports will get worse.

Heathrow’s crumbling infrastructure was criticised over the summer by numerous people including Ken Livingstone, the Mayor of London, who said that the airport “shamed” the capital.

There was little sympathy for BAA among the airlines that use its facilities.

One said that Ferrovial had loaded itself with debt expecting to enjoy bumper profits but had bitten off more than it can chew.

BAA’s claims for higher charges were also questioned on the grounds of its poor service standards.

The Competition Commission said that BAA was acting against the public interest by failing to deal with agonisingly long security queues at its airports.

The commission’s report revealed that during certain months last year nearly half of all passengers travelling through Heathrow’s Terminal 4 security gates were delayed.

In its report the commission has proposed that passenger charges should be capped at £10.96 at Heathrow, up from £9.26, and £5.48 at Gatwick, up from £4.91.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax