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BAA to start expansion programme in China


BAA will begin a major overseas expansion programme in China next month with the opening of retail facilities at Shanghai’s new Pudong International Airport.



The airport operator’s World Duty Free subsidiary will run tax-free outlets at the 20m capacity Pudong, which replaces the city’s Hong Qiao airport next month.



BAA, which runs seven UK airports including Heathrow, Gatwick and Stansted, is also negotiating to manage up to six Chinese airports following its success in being chosen to provide the Shanghai facilities.



The regional Chinese airports to be managed have yet to be chosen, but they will handle between 2m and 5m passengers every year. They will be run through a joint-venture called Allied Airport Management Company, which has been set up by BAA Pacific and the China Airport Construction Company.



A spokeswoman said the management contracts will be awarded next year and will run for 15 years. They are expected to include deals for BAA to run the retail side of the airports.



BAA has specifically targeted China for expansion as the country’s airline industry is experiencing rapid growth.



Carriers, including Air China and China Eastern Airlines, are considering joining global alliances and the number of tourists to the country is on the increase.



The spokeswoman confirmed that BAA was also looking to take a stake in Beijing Airport, China’s largest airport, when it is floated on the Hong Kong stock market later this year. The capital raised will pay for improved facilities as international airlines look to launch additional flights to the Chinese capital.



Virgin Atlantic is planning services to Beijing in order to complement its twice- weekly Shanghai services, launched earlier this summer. The airline is planning to double these services during 2000 at the new Pudong airport.



British Airways is also considering more flights to Beijing, increasing its four-weekly services from Heathrow.



These ventures into China are BAA’s first in the growing Asia market.



The airport owner manages airports in Melbourne and Launceston in Australia, Pittsburgh, Mauritius and Naples.



The firm also runs the retail sites at Indianapolis and New York’s Harrisburg and Newark airports.


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