| Type | Private |
|---|---|
| Industry | Transport |
| Founded | 13 December 1985 (as BAA PLC) |
| Headquarters | Compass Centre London Heathrow Airport London, United Kingdom |
| Key people | Colin Matthews (CEO) Sir Nigel Rudd (Chairman) |
| Products | Airport operations and services |
| Revenue | £2,567 million (2008) |
| Operating income | £434.7 million (2008) |
| Employees | 13,000 approx. (2008) |
| Parent | FGP TopCo Limited |
| Website | baa.com |
BAA Ltd. is the Spanish-owned operator of six British airports (including Heathrow Airport) and Naples Airport in Italy, making the company one of the largest transport companies in the world. BAA stems from British Airports Authority and is owned by a consortium led by Grupo Ferrovial, a Spanish firm specialising in infrastructure. The company's head office is located in The Compass Centre on the grounds of London Heathrow Airport in the London Borough of Hillingdon.
BAA makes money from charging landing fees to airlines and increasingly from ancillary operations within those airports such as retail and property. BAA does not operate all UK airports - most are in the ownership of local authorities or other corporations.
BAA was once a constituent of the FTSE 100 Index but is now owned by FGP TopCo Limited, an international consortium, which includes Caisse de dépôt et placement du Québec and GIC Special Investments, that is led by the Spanish Ferrovial Group.[1]
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The British Airports Authority was established by the passing of Airport Authority Act 1965, to take responsibility for three state-owned airports - London Heathrow Airport, London Gatwick Airport, and London Stansted Airport. In the following few years, the authority acquired responsibility for Glasgow International Airport, Edinburgh Airport, Southampton Airport and Aberdeen Airport. The Authority took on the Ministry of Civil Aviation Constabulary in 1946, which was renamed to become the British Airports Authority Constabulary, and was disbanded between 1974 and 1975.
As part of Margaret Thatcher's moves to privatise government owned assets, the Airports Act 1986 was passed which mandated the creation of BAA plc as a vehicle by which stock market funds could be raised. The initial capitalisation of BAA plc was £1,225 million. In the early 1990s, the company sold Prestwick International Airport (now known as Glasgow Prestwick Airport).
In July 2006, BAA was taken over by a consortium led by Grupo Ferrovial, following a bid which valued the company at £10.1 billion ($20 billion).[2] As a result, the company was delisted from the London Stock Exchange (where it had previously been part of the FTSE100 index) on 15 August 2006, and the company name was subsequently changed from BAA plc to BAA Limited.
As a major client of the UK construction industry, it is a member of the Construction Clients' Group, which represents client views to the government's Strategic Forum for Construction.
Recently BAA has expanded into international operations, including retail contracts at Boston Logan International Airport and Baltimore-Washington International Thurgood Marshall Airport (through its subsidiary BAA USA, Inc.), and a management contract with the City of Indianapolis to run the Indianapolis International Airport (as BAA Indianapolis, Inc.).
In December 2005, BAA made a winning bid of £1.2 billion for a 75% stake in Budapest Ferihegy International Airport, the largest airport in Hungary, which was being privatised by the Hungarian government. Following the take-over of BAA by Grupo Ferrovial in 2006, the decision was made to sell the stake in Ferihegy and this was completed in June 2007, when a consortium led by Hochtief AirPort of Germany purchased the stake.[3]
Although the company is adamant that its name is strictly "BAA Limited" and that the letters do not officially stand for anything, it is still widely (albeit erroneously) referred to as the "British Airports Authority" by both the media and the public - even though the Authority was dissolved following the 1986 privatisation.[4]
BAA has garnered criticism for its handling of Heathrow, namely its predominant placement of shops rather than extra security aisles.[2] After much criticism for this, BAA has now removed some shops to provide extra security lanes. The Economist writes that retail is important for BAA at Heathrow because, by law, landing charges are much less than those of similar-scope airports and retail shops help make up the difference.[2]
BAA has been accused of under-investing in snow and ice-fighting technology at Heathrow, which led to runway closures and severe delays in December 2010.[7] Heathrow plans to spend just £3.5 million on this technology during 2010-2014, compared with spending of £8 million during the same period at Gatwick, an airport half its size.
BAA operates its airports in a way that seeks to meet the needs of passengers and airlines while at the same time providing an appropriate return on investment.[8] BAA's pricing structure effectively prohibits mainstream General Aviation access to their airports by setting unrealistic fees and mandatory handling for light aircraft.
Flights for recreational, commemorative, charity and record breaking purposes, light twin engined private aircraft and all light single engined aircraft are not permitted to use Heathrow Airport.[9]
In 2011, landing a Cessna 152 at Stansted Airport would cost £293 (inc.VAT), and parking for three days would cost an additional £260 (inc.VAT).[10] These fees would be considered unaffordable by the majority of private pilots.
After an enquiry from August 2008–March 2009,[11] the UK Competition Commission announced that BAA will be forced to sell three of the seven UK airports it owned at the time. Gatwick, Stansted and one of either Glasgow or Edinburgh airports within two years over fears the monopoly position held by BAA over London and Scotland's airports could have “adverse effects for both passengers and airlines”. The sales are likely to raise between £3.5bn and £4bn.[12]
On 19 October 2011, BAA Announced that Edinburgh Airport would be put up for sale [13] in early 2012 with an aim to handing over the running of the site to a new owner by Summer 2012. Numerous groups are reported to have expressed interest, including a consortium of Scottish businesses headed by former Edinburgh Airport Manager, and Fraport, the owners of Frankfurt Airport, Germany.
BAA announced plans to sell Gatwick Airport on 17 September 2008.[14] At that time, Gatwick Airport was valued at £1.8bn by regulators and it appeared that multiple firms including Macquarie Group, Fraport and Virgin Atlantic were interested in this sale, either on their own or as part of a consortium of companies.[15] Ferrovial and its partners (Government of Singapore Investment Corporation and Quebec’s state pension fund) had been seeking £1.8bn- £2bn when they opened the bidding process.[5]
Eventually, the sale was confirmed on 21 October 2009 and formally completed on 3 December 2009, for a fee of £1.51 billion. This is almost 25 per cent less than BAA had expected Gatwick would fetch when the sale was announced a year previously.[6] BAA sold the airport to Global Infrastructure Partners, the fund backed by Credit Suisse and General Electric, who also operate London City Airport. Ferrovial, the majority holder in BAA, said that it expected to make a capital loss of around 142 million euros (US$ 212.6 million) against its consolidated earnings following the sale.[16]
In July 2007 BAA sought an injunction preventing potential protesters involved in the Camp for Climate Action from approaching its London Heathrow Airport. The injunction specifically targeted anyone belonging to, or protesting in the name of, AirportWatch, The No Third Runway Action Group and Plane Stupid. However, Airport Watch members included Friends of the Earth, Greenpeace, the Campaign to Protect Rural England, the World Development Movement, the National Trust and the Royal Society for the Protection of Birds - all of whom were caught by what became known as the 'Mother of all Injunctions'.[17] BAA denied seeking a blanket ban on airport protest. In the end BAA won a very much more limited injunction[18] and the camp went ahead amid considerable worldwide publicity.[19] Afterward, Duncan Bonfield, BAA director of corporate affairs, and Mark Mann, BAA head of media relations, resigned.[20]
BAA is a founding member of Flying Matters,[21] a coalition of business groups, trade unions, tourism groups and the aviation industry (airports, airlines, aerospace manufacturers and air traffic control)[22] launched in June 2007[23] to "balance the argument around issues of aviation and climate change" arguing that aviation does not contribute significantly to climate change, and that an expansion of aviation will aid the developing world, benefit social justice, and is essential for UK tourism and for the UK economy.
| Owner | Shares | Corporation | Shares | Corporation |
|---|---|---|---|---|
| Ferrovial Group | 55,87% | - | - | Airport Investment and Development Ltd |
| Caisse de dépôt et placement du Québec | 26,48% | Airports Infrastructure Fund LP | 26,48% | |
| GIC Special Investments | 17,65% | Baker Street Investment Pte Ltd | 17,65% |
BAA Limited's head office is located in the Compass Centre on the grounds of London Heathrow Airport in the London Borough of Hillingdon.[24][25] Compass Centre previously served as a British Airways flight crew centre.[26] When London Heathrow Terminal 5 opened on 27 March 2008, British Airways staff, including crew check-in staff, relocated from the Compass Centre to Terminal 5.[27]
BAA Limited's head office was previously located near London Victoria station in the City of Westminster, London.[28][29][30]