BAA may be forced to sell either Glasgow or Edinburgh airports in a shake-up to be ordered by the Competition Commission that will reshape air travel in the UK.

Spanish-owned Ferrovial’s monopolies in London and Scotland would be broken up in an attempt to give consumers a better service.

Recommendations by the commission, to be published in August, are expected to call for BAA to sell the London airports Gatwick, Stansted, or both. The company has said that it will not sell Heathrow.

In Scotland, the commission has its eye on BAA’s airports at Edinburgh, Glasgow and Aberdeen, although it is likely to leave the decision on which is to be sold to the company.

Passengers are expected to benefit from the shake-up as rival airports compete to offer better services at lower cost.

The commission indicated yesterday that company's airport monopolies in London and Scotland would be broken up because they were failing to provide passengers with a good service.

The commission said: “Under separate ownership there would be potential for competition between Edinburgh and Glasgow, and between Aberdeen and the other two BAA airports in Scotland, although the evidence on Aberdeen is less strong.”

The commission may say in August that BAA should no longer own both Glasgow and Edinburgh, but it is unlikely to dictate which airport it should sell. Edinburgh has grown rapidly and is expected shortly to take over from Glasgow as Scotland's busiest airport.

Passengers could expect rival companies to compete fiercely for their custom by upgrading terminals, offering cheaper deals in shops and restaurants and reducing aircraft landing fees.

BAA is widely expected to act before the commission forces its hand, possibly by selling Gatwick within months. A new owner would almost certainly revive plans for a second runway. However, Ferrovial, BAA's heavily indebted owner, is determined to retain control of Heathrow.

The commission said that splitting up ownership of the three main London airports would result in greater efforts to create extra capacity and relieve overcrowding. “Separate ownership would itself create a greater incentive to expand capacity.”

A commission source said: “It is very odd that BAA has belatedly supported expansion of Heathrow and Stansted but not Gatwick. The first thing a new owner of Gatwick would do is look at options for expansion, including a new runway.”

In 2003 the Department for Transport published possible locations for a new Gatwick runway, to the south of the existing one. The new runway would almost double the number of flights to 486,000 a year, 10,000 more than at Heathrow last year.

BAA signed a legal agreement in 1979 with West Sussex County Council in which it agreed not to start building a new runway until 2019. But this could be overturned by Parliament.

The commission strongly criticised BAA for being slow to promote expansion since it was privatised 20 years ago. It said that the company had been too willing to wait for the Government to express its preference. BAA had “been too prepared to accept or even offer to have constraints placed on it, including commitments not to expand further at an airport, in order to secure planning permission for the more immediate development”.

It added: “We are therefore minded to conclude that BAA's actions throughout the 1990s exacerbated delays in the delivery of runway capacity in the South East.”

Brendon Sewill, chairman of the Gatwick Area Conservation Campaign, said: “It is alarming to find the prospect of a second runway being revived.”

The commission said that BAA appeared to be unable to cope with more than one big building project at a time. Christopher Clarke, the chairman, said: “We are particularly concerned by [BAA's] apparent lack of responsiveness to the differing needs of its airline customers, and hence passengers, and the consequences for the levels, quality, scope, location and timing of investment and levels and quality of service.”

The commission also expressed doubts about the effectiveness of the Civil Aviation Authority's “light-touch” regulation of BAA's London monopoly. But it said this was a secondary issue and indicated that tougher regulation could only be part of the solution, not an alternative to a break-up.

Ruth Kelly, the Transport Secretary, announced a review yesterday of airport regulation, which she said had “potential shortcomings”. The Government is focusing on improvements to regulation because it is worried that breaking up BAA would disrupt its plans for a third runway and sixth terminal at Heathrow and a second runway and terminal at Stansted.

BAA rejected the commission's view that London airports could compete with each other to the benefit of passengers. It said that Heathrow competed with other European hubs. Colin Matthews, chief executive, said: “BAA remains of the view that its ownership is in passengers' interests, in terms of tackling the shorter-term service problems, and in following through with major commitments to investment in new facilities and capacity.”

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