Service levels at Heathrow are a "national embarrassment" and the airport's regulator is the worst in the world, the head of the International Air Transport Association (IATA) said today.

Giovanni Bisignani, the director general of IATA, criticised the Civil Aviation Authority (CAA), which oversees UK aviation, and BAA, the airports operator, for the poor service they have provided passengers.

At IATA's annual conference in Turkey, the CAA was dubbed the "worst regulator of the year" after it allowed BAA to increase landing charges by 86 per cent over the next five years.

Mr Bisignani said: "Look at Heathrow. Service levels are a national embarrassment but still the CAA increased charges by 50% over the last five years, and plan 86% for the next five. Could anyone in this room ask for a fare increase of 86%? Nobody. That only happens in Monopoly-land."

The Competition Commission is investigating whether to break up BAA's monopoly control of London's airports - Heathrow, Gatwick and Stansted - and the Government has also announced a review of the CAA's regulation of UK airports.

Mr Bisignani also gave warning that the global airline industry, which IATA represents, is heading into difficulty because of sustained high oil prices.

IATA downgraded its prospects for the industry for the fourth time and is predicting losses of $2.3 billion this year.

Last year the association predicted that worldwide profits would be $7.8 billion in 2008 but cut this to $5 billion in November and reduced it further to $4.5 billion in March. Mr Bisignani said today that, if the price of oil stayed at its current level of about $135 a barrel, the losses could grow to more than $6 billion.

The airline industry reported a collective profit of $5.6 billion last year, its first year in the black since 2000. However, rising costs are driving carriers into bankruptcy and Silverjet, the business-class carrier that operated from Luton, became the latest to suspend operations last Friday.

Mr Bisignani said that every $1 increase in the oil price added $1.6 billion to the global industry's fuel bill.

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