BAA confirmed today that Colin Matthews will replace Stephen Nelson as chief executive of the airports operator and start five days after the opening of its critical flagship construction project, Terminal 5.

Mr Matthews, a former Severn Trent and Hays chief executive, arrives at a crucial time for the owner of Heathrow and Gatwick, which is battling on a number of fronts to secure its long-term future.

The new chief executive will be forced to consider drastic measures to reduce its £10 billion debt, including a cash injection from a new investor or a sovereign wealth fund.

The company, which owns Heathrow, Gatwick and Stansted airports, wants to reduce its interest payments by refinancing the debt.

Its preferred option is to securitise income from the airports and replace about £4.7 billion of bonds.

It is also selling assets, including the retailer World Duty Free.

The credit crunch has made debt deals hard to put together, but BAA said it hoped to refinance by the middle of this year.

If it failed to refinance, its interest rate burden would rise further and the debt could be moved to junk status, making it almost impossible for the company to raise more money.

Analysts have given warning that this could lead to BAA running out of cash, potentially forcing it to stop maintenance at airports and to halt building projects, such as the renovation of Heathrow’s Terminals 1 and 2 before the 2012 Olympics in London.

BAA's Spanish owners Ferrovial has said that it can continue with its existing financing arrangements until 2011, but analysts believe that it must complete a deal within a few months or the company could be crippled.

Alternatives to the securitisation plan are thought to include taking on new bank debt or finding someone to swap debt for equity.

BAA is advised by Royal Bank of Scotland and Citigroup. The latter received a cash injection from the Abu Dhabi sovereign wealth fund last year.

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