British airport company BAA faces having to sell two of its three London airports, the British Competition Commission said, rekindling interest by German firm Hochtief in acquiring Gatwick.
Drop in service standards and delays have caused problems for BAA
The commission, which monitors competition standards, said in a preliminary report issued Wednesday and due to be confirmed in April, that the airport operator should sell two of its airports -- a choice between Heathrow, Gatwick and Stansted.
The watchdog also recommended that BAA give up one of its two Scottish airports, Edinburgh or Glasgow. In total, BAA runs seven British airports.
The final decision over the future of the airports would be taken in April, said the commission, which had found that the undivided ownership of Britain's leading airports was having "adverse consequences" on air traffic for passengers and airlines.
Reacting to the report, BAA chief Colin Matthews insisted the company would not sell Heathrow, yet he conceded the watchdog's findings on "poor service" and "frustration" for passengers.
German firm watching BAA situation
In Germany, Essen-based company Hochtief said it continued to have a "great interest" in Gatwick, the UK's second-largest airport.
Hochtief is Germany's largest construction company with subsidiaries in the US and Australia.
However, it remained unclear at this time when and under which conditions the company would get involved, a company spokeswoman said.
BAA-owned Stansted Airport may be up for sale in the near future
She said the company would also be interested in other BAA airports should they become available.
"We will look at all of them," she said, adding that further advances were expected in the coming months.
Hochtief had said in the past it wanted to expand its operations and concessions business which also includes airports. The company is currently considering stakes in airports in Riga, St. Petersburg and Prague.
Delays, service standards to blame
BAA, which belongs to Spanish multinational Grupo Ferrovial, has come under pressure in recent years over delays and service standards at its airports. The report especially blamed the company for slow responses to passenger concerns and the failure to expand its airports' capacities.
The company reacted by accusing the competition watchdog of errors in judgment and said an airport sale would be counterproductive.
Airlines including Ryanair, Virgin Atlantic Airways and EasyJet welcomed the commission's findings.
British airport operator Manchester Airport Group also expressed interest in one of the three London hubs, which process 90 percent of all air traffic into London.
The group, which operates airports in Manchester, Bournemouth, East Midlands and Humberside, said it was considering "one or more" BAA airports.