Leisure airline Monarch has terminated two contracts with Swissport, one of the baggage-handling companies at Gatwick airport.
It follows chaotic scenes last weekend, when passengers were left waiting for up to three hours for luggage.
Gatwick said Swissport was failing to meet the airport's service standards, which was "not good enough".
But Swissport said last weekend's problems were exceptional, and should not be repeated.
It has blamed the delays on too many aircraft arriving in quick succession - either late or early - which it called "off-schedule arrivals".
End Quote Spokesman Gatwick AirportAlthough bags have been delivered on time for 95% of flights, this is not good enough."
It is thought that Monarch's decision was not specifically to do with the issues at Gatwick last weekend, but because of service levels generally.
The BBC understands a new baggage handler will be appointed by November.
Monarch is also terminating a contract with Swissport at Manchester airport.
'Frustrating'Gatwick said it was having to provide 30 extra staff of its own, to help transport bags to the terminals and to unload luggage on to belts.
If there are further problems this weekend, it will also offer to deliver passengers' bags to their home addresses.
Depending on the airlines concerned, it will make the offer to passengers if they have to wait 90 minutes or an hour to get their baggage.
"This has been frustrating for passengers and we are disappointed with the recent baggage arrival service," said a spokesperson for the airport.
Two other baggage-handling firms at Gatwick are meeting the relevant service standards.
"Recently, Swissport has failed to meet these standards," the spokesperson said.
"Although bags have been delivered on time for 95% of flights, this is not good enough," he added.
Gatwick requires that luggage from large aircraft should be on the carousels within 55 minutes of a plane's arrival.
Luggage from small planes should be delivered within 35 minutes.
Zero hoursAfter similar delays at the end of June, Gatwick airport blamed a shortage of staff at Swissport.
One suggestion was that the baggage handler was employing too many staff on zero hours contracts, and could not get enough workers to volunteer for week-end shifts.
But Swissport denied this, saying that out of 1500 staff, it employs fewer than 50 on zero hours - and they all choose to be on such contracts.
"Zero hours is not the issue," said a spokesman for Swissport.
"The problems at the week-end related to 20 aircraft being off-schedule between 11pm and 1am. There are no service problems now," he insisted.
Are you at Gatwick Airport? Have you been affected by the luggage problems? Please share your comments with us. You can email haveyoursay@bbc.co.uk using the subject line 'Gatwick'.
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