BAA loses operating chief to end bad week

BAA ended a bad week for the airports operator yesterday with the announcement that Stephen Baxter, its chief operating officer, is to quit the company.

Mr Baxter is leaving BAA in order to become chief executive of Peel Ports, the operator of several regional airports in the UK.

This week, the Competition Commission told BAA that it would have to put up with much lower rates of return from its operations at Heathrow and Gatwick, along with strict increases in the fees per passenger the company charges.

BAA, which endured a difficult summer, facing criticism for problems at Heathrow, warned that the commission's proposal could jeopardise its investment plans for its flagship airport.

Stephen Nelson, BAA's chief executive, said he had accepted Mr Baxter's resignation with regret. "While I am clearly disappointed at the timing of Stephen's departure, I understand that his new role allows him to spend more time in Glasgow."

Meanwhile analysts warned that the Competition Commission's ruling could lead to credit ratings agencies downgrading their ratings of BAA's debt. The company, owned by the Spanish conglomerate Ferrovial, is seeking to refinance almost £10bn of debt, but its credit-default swaps rose to record prices yesterday. The contracts, a way for investors to speculate on the chances of BAA defaulting on bonds, rose in price amid rumours that Moody's would downgrade the bonds.