UK AIRPORT OPERATOR BAA has signed a contract with the US Indianapolis Airport Authority (IAA) for the management of the city's airport system, consisting of Indianapolis International Airport, Downtown Heliport, and the four general-aviation (GA) fields of Mt Comfort, Speedway, Metropolitan and Eagle Creek.

The ten-year agreement, to take effect from 1 October, is BAA's first venture in operating a complete airport system abroad. It follows its success in managing the retail operations at Pittsburgh, Pennsylvania, where it has increased passenger spending per head from $2.50 to more than $6 in the last three years. Indianapolis, which handled 6.5 million passengers in 1994, also becomes the first US airport to call in foreign expertise.

Under the terms of the agreement, BAA guarantees IAA minimum savings of $32 million over the ten years, but has limited financial exposure, since capital expenditure remains the responsibility of the authority. Income for BAA will come from a share in savings, which exceed the guaranteed minimum each year, and are expected to total at least $20 million. A portion of earnings will be linked to quality improvements.

BAA will operate and maintain terminal businesses, including retail outlets, restaurants and bars, airside operations, short- and long-term parking and GA activities.

Indianapolis and Pittsburgh represent only the first steps in BAA's global ambitions. It is keeping a close watch on Italian moves to privatise the Rome airport system and, more immediately, on Australia's Federal Airports, which is offloading its 22 airports. BAA, in partnership with Australian financial institutions, is bidding for Perth and Sydney, which would involve an investment of around $500 million.

Source: Flight International