Committee of British MPs call for BAA break-up

LONDON, March 15 (Reuters) - An influential committee of politicians has joined a group of airlines in demanding the break-up of British airport operator BAA, arguing its dominance in London and Scotland has stifled competition.

"There is room for more competition, especially between London airports. BAA airports account for such a large proportion of air travel," a report from the House of Common Transport Committee said on Saturday.

"Ending BAA's common ownership will encourage airports to compete for traffic. The Committee firmly believes that increased competition is possible and could have huge benefits for both airlines and passengers."

BAA, owned by Spanish construction and services firm Ferrovial (FER.MC: Quote, Profile, Research, Stock Buzz), operates London's Heathrow, Gatwick and Stansted airports, Southampton airport and Scottish airports at Edinburgh, Aberdeen and Glasgow, serving nearly 150 million passengers each year between them.

Thr firm, whose dominance of London airports is being investigated by Britain's competition watchdog, accounted for 85 percent of all commercial air transport movements in the London area in 2006. "The extent to which BAA needs chivvying along by the regulator reflects poorly on their avowed commitment to service quality. We hope that the Competition Commission will take the steps necessary to ensure a healthy, competitive airports sector for the years to come," the report said. Airlines including Virgin Atlantic [VA.UL], easyJet (EZJ.L: Quote, Profile, Research, Stock Buzz), Ryanair (RYA.I: Quote, Profile, Research, Stock Buzz) and bmi called for a break-up of BAA's stranglehold on London airports this week as regulators allowed the operator to almost double airline charges in the next five years.

The Civil Aviation Authority said on Tuesday that BAA would need the money to improve security and reduce airport queuing, following regular delays and losses of baggage for which it has been dubbed "Heathrow hassle."

Overcrowding has long been a problem at Heathrow but tighter security after the U.S. hijacking attacks of September 11, 2001, have meant even longer queues.

The Competition Commission is expected to issue its provisional findings this summer and final recommendations by the end of 2008. (Reporting by Miyoung Kim; editing by Rory Channing)