BAA promises commercial boost at Baltimore-Washington

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The UK airport operator's US subsidiary will benefit from a huge expansion at Baltimore-Washington International airport's retail mall after finally being granted the 10-year contract

BAA USA is predicting commercial revenues at Baltimore-Washington International airport will soar after the Marlyand Aviation Administration awarded the British airport operator's US division a 10-year contract to manage the airport's shopping mall. The company has said it expects the airport's revenue from the mall to grow from $7m to around $11m annually after a renovation almost doubling its size, to 141,000sq ft (13,104sq m), is completed next year. BAA also expects to grow the airport's retail revenue per passenger to around $7.36 within a few years, said The Washington Times?exceeding the $5.50 achieved by current concessionaire HMSHost.

BAA and its subtenants will invest around $40m to $45m in the project, with BAA's commitment approaching $12m. The developer has already begun negotiations with several local and national brands, including Borders booksellers, confectioner Godiva and Swatch. The Baltimore Sun said several local catering firms had also been approached. In accordance with federal regulations on airport business, BAA will aim for at least 30% participation by disadvantaged business enterprises, companies operated or owned by ethnic minorities or women.

HMSHost, which operates 60 outlets at the airport, had appealed an earlier decision to award BAA the contract, claiming it had been unfairly eliminated from the bidding process. But the Maryland administration overturned the appeal, saying it had hoped to attract a developer to lease out stores to individual tenants, rather than a prime concessionaire like HMSHost, which develops and operates stores itself.

BAA ceo Mike Clasper said: ?Winning airport retail contracts is a key part of our international strategy.  We have already demonstrated we can improve the passenger experience and increase revenues and profits for the airport and for BAA, by applying our knowledge and experience with modest capital investment. We will continue to seek similar opportunities in the US and elsewhere.?

The contract at Baltimore-Washington, which serves around 19m passengers each year, adds to BAA USA's other business at Boston Logan airport, where it operates commercial activities at terminals E and B, and at Pittsburgh airport, where the company originated its Airmall airport retail concept. BAA USA also has a management contract at Indianapolis airport.