BAA, the company which runs London's three main airports, is facing an inquiry by the Competition Commission into its plans to make airlines pay more.

The firm - which runs airports up and down the country as well as the massive facilities at Heathrow, Gatwick and Stansted - said in March that it wants to boost fees by up to 40% over the next five years.

The Competition Commission will be looking at whether BAA has done anything which could be against the public interest at the three London airports.

In particular, it will examine whether the three should be regulated as a single unit or individually.

Hard pressed

The letter to BAA - and to the Civil Aviation Authority, which regulates the aviation industry overall in the UK - marks the start of the main phase of the inquiry.

But already, the commission said, a great deal of evidence had been received - particularly from the airlines themselves.

They are staunchly opposed to any rise in fees, complaining that the added burden of sky-high insurance costs and slimmer revenues after 11 September mean that they can ill afford further cost increases.

BAA, on the other hand, insists that its prices are among the lowest in the business.

Also up for examination is BAA's lucrative retail and commercial business.

At present, profits accruing to BAA from the dozens of shops and other outlets scattered around Heathrow, Gatwick and Stansted are used to offset the charges paid by airlines.

The CAA has proposed scrapping this system, and instead linking charges directly to aeronautical costs alone.