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BAA chief executive Stephen Nelson is to step down as the airport operator faces challenges to get back on track.

Colin Matthews, formerly chief executive of Severn Trent and director of technical operations at BA, will take over the role from Mr Nelson who has been chief executive since 2006.

BAA is preparing for the opening of terminal five at Heathrow next month. Meanwhile, the company is also campaigning for a third runway at the airport, which is Britain's largest.

In addition, the company wants to negotiate a refinancing of its debt, while also bracing itself for a new regulatory framework relating to landing fees at its airports.

BAA's chairman, Sir Nigel Rudd, said: "Based on his extensive experience in the retail industry, Stephen put serving the customer, the passenger, first on BAA’s list of priorities. That, and the successful completion of terminal five, will be his lasting legacy to this company.

"But BAA is now entering a new era, in which we have to not only complete the transformation of our airports that T5 has begun, but also meet the new demands for quality service and environmental responsibility.

This is also a period in which BAA will be to the fore in arguing for a new regulatory framework which recognises those priorities. Colin Matthews has the right background and experience to take BAA into that new era."

Sir Nigel was brought in last year by Rafael del Pino, chairman of Ferrovial, the Spanish company that bought BAA in 2006.