Nelson the latest casualty of BAA fiasco

Stephen Nelson has quit as BAA boss after 20 ignominious months. Bet he's glad he took that job.

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Last Updated: 31 Aug 2010

Nelson, who was appointed in July 2006 when Spanish group Ferrovial bought the business, is stepping down as BAA’s chief executive just as the beleaguered UK airport operator prepares to face yet more misery. It’s about to renegotiate its crippling £9bn debt package at a time when the world’s financial markets are in meltdown, it’s coming under pressure from regulators and environmental groups and its airports are widely considered to be the worst in the business.

It’s fair to say that Nelson’s tenure hasn’t exactly been a spectacularly successful period in BAA’s history. Since the Ferrovial takeover in 2006, service levels have plummeted at BAA’s UK airports – partly because Nelson has been forced to squeeze his assets until the pips squeak, to try and pay the interest on the debt. Coupled with new security regulations, this has turned the airports into little more than dirty, over-crowded, badly-organised shopping malls.

Since Nelson’s background is in retail – he was on the board at Sainsbury before moving to BAA as retail director – this is perhaps not entirely surprising. But the company’s reputation has taken a battering on his watch. According to the Association of European Airlines, Heathrow and Gatwick were the two worst airports for flight delays in 2007, while British Airways was the worst performing airline. None of which is really the kind of thing a CEO wants on his CV.

And the worst could be yet to come. Although standards seem to be recovering slightly at Heathrow et al (at least we thought so on recent visits, you may beg to differ?), chances are that any new debt package would be even more burdensome. BAA is also facing massive regulatory scrutiny about its fees and charges, which could even lead to the break-up of its London monopoly. Terminal Five is about to open, and it's bound to have teething problems. And that’s not to mention the controversial campaign for a third runway at Heathrow…

Nelson’s not the first senior BAA boss to leave since the takeover, but the fact that he was a Ferrovial appointment suggests his departure could be the work of Sir Nigel Rudd, the ex-Boots man brought in as chairman last year to try and revive the group’s fortunes.

Apparently Rudd will now bring in ex-Severn Trent CEO Colin Matthew, a former head of technical operations at BA, to run the show instead. We’re just amazed that he’d actually want the job – surely it’s the most poisoned chalice in UK business? Or perhaps Matthew just thinks that he can’t possibly do any worse than the last bloke...

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