Service levels at London's Heathrow Airport are a "national embarrassment", the head of the International Air Transport Association (IATA) said on Monday.

The airport was plunged into chaos in March following the opening of the 4.3 billion pound Terminal 5.

British Airways cancelled hundreds of flights and misplaced tens of thousands of pieces of luggage in the wake of its move there. Subsequently it parted company with two senior managers.

"This year's Worst Regulator Award goes to the UK Civil Aviation Authority (CAA). Look at Heathrow. Service levels are a national embarrassment," IATA Director General Giovanni Bisignani said in a speech at its annual meeting in Istanbul.

"But still the CAA increased charges by 50 percent over the last five years and plan 86 percent for the next five. Could anyone in this room ask for a fare increase of 86 percent? Nobody. That only happens in monopoly land," he said.