Heathrow is the world’s busiest international airport and is patently not up to the task. It is not simply the overcrowding in the terminals, the lengthy waits at check-in counters and the exasperating hold-ups at the security gates; almost worse than this is the inexcusable mêlée suffered by millions of visitors who must present visas and often have to wait up to an hour before they are called to the immigration desk. Britons complain about the chaos on leaving Heathrow; but it has been left to the City and business interests to protest at the delays that overseas visitors experience, now so serious that they threaten London’s position as a global economic centre.

Of course the summer peak is always a bad time, and it is not only Heathrow that is overcrowded. Stansted, which carries more Britons on holiday than any other airport, also has long queues and a similar inexplicable shortage of staff to enforce security inspections and immigration controls. But it is Heathrow, especially, that casts what Ken Livingstone, the Mayor of London, denounced as “shame” on the capital and where BAA needs to make immediate changes. British Airways, the airport’s biggest customer, said that the unprecedented congestion was beginning to drive passengers away, contributing to a fall in numbers in the last quarter.

BAA readily admits that things need improving, but argues that much of the overcrowding will disappear when Terminal 5 opens in March. In the meantime, it contends, it has recruited 500 extra staff, is to remove some shops to make extra space for security checks and has been lobbying hard to explain and simplify the restrictions imposed after the scare last year over liquid explosives. None of that cuts much ice. BAA has had more than a year to cope with the new security burdens. It has barely removed any shops, on which it depends heavily for revenue. Many of the new staff are still not trained. And the airport is rebuilding the outside of Terminal 3, the most overcrowded, at the height of the summer rush.

Part of the problem is that Ferrovial, the Spanish company that heads the consortium that bought BAA last year, appears to have bitten off more than it can chew. The scale of the airport’s overcrowding is staggering: designed for an annual capacity of 45 million it now handles 68 million people a year, with 220,000 passengers a day during the summer peak. But the investment needed is huge: Terminal 2 and the Queen’s Building are to be torn down to make way for Heathrow East, Terminal 1 will be rebuilt as a baggage hall and Terminal 4, now showing its age, will also be renovated starting next year.

Next year the Civil Aviation Authority begins a new five-year regulatory period, in which it will set the charges that BAA can levy on its customers. At the same time the CAA will specify what investment is needed and how much BAA can earn on its regulatory asset base. This regime is clearly not working, and discourages BAA from investing now so that the targets in the coming five years will not be set too high. As it is, BAA receives no public funding for the new security measures imposed after a series of terrorist scares – though it can, and does, recover some money from hard-pressed airlines. Nor does it receive subsidies for the improvements needed, although these have a direct bearing on the national economy. But it is not short of revenue, earning a profit of £620 million last year.

The underlying issue, however, is whether BAA is now too large for a single operator to manage. There is growing criticism, from airlines, passengers and business, that ownership of Heathrow, Stansted and Gatwick constitutes a monopoly over Britain’s busiest airports, and the Competition Commission is likely to favour breaking up this grouping in a ruling expected next year. Partly to preempt this and because it is running into management difficulties, Ferrovial is likely to sell one of its three London airports – probably Gatwick. That would introduce greater competition which ought, in turn, to spur improvements at the other two airports. But waiting until then is not enough. The present conditions are intolerable. BAA must spend to make emergency changes at Heathrow now.