BAA in talks to manage New York airports

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The Independent Online

Management of the John F Kennedy international airport near New York City could fall into the hands of London-listed airports operator BAA. The contract would be the world's largest third-party airport management in terms of passenger numbers.

The City of New York said yesterday it is in exclusive talks with BAA over a consultancy and management contract for JFK and its domestic counterpart, LaGuardia airport.

The Port Authority of New York and New Jersey has a contract to run the airports until 2015. However, Rudolph Guiliani, Mayor of New York, yesterday hinted that BAA could take over the airports sooner. He said the talks with BAA concerned consulting services in the first instance, although the company could assume management of the airports in 2015 "or earlier if the lease is terminated".

"New Yorkers, and visitors to the city, are not getting the kind of service they deserve," said Mr Guiliani. "The Port Authority has proven itself unable or unwilling to maintain JFK and LaGuardia as first-class airports. We have every expectation that under new management, New York City's airports will thrive."

The City is thought to have offered $2bn (£1.25bn) to the Port Authority to terminate its contract. The negotiations threaten the friendly relationship between BAA and the Port Authority, which engages BAA to run retail outlets at New Jersey's Newark airport. BAA declined to indicate when a contract could be awarded or its value. "We are pleased the city has said we're the leading contender," a spokesman said.

Last year BAA, which operates Heathrow and Gatwick airports near London, generated £48m in sales and £6m in profits from managing eight airports overseas. The combination of JFK's 32 million passengers year and LaGuardia's 24 million would make a management contract for the pair the world's largest airport outsourcing deal.

BAA has seen off competition from Schiphol, the Dutch airport operator, Hochtief, the German group, and Unique Zurich Airport. BAA shares, still languishing after the abolition of European duty free, closed up 14.5p at 424p.