"Scottish airports propel BAA"

Wednesday, November 3, 2004

Scottish airports propel BAA 
BY SIMON BAIN
United Kingdom - The Glasgow Herald


Scotland's major airports enjoyed strong growth in passenger traffic and
operating profits in the six months to the end of September, according to
interim results posted yesterday by BAA.

Aberdeen airport recorded its first sustained increase since the end of
2002, with a 4.8% rise in passenger traffic, while Edinburgh, with a 7.6%
rise, continued to outpace Glasgow where traffic rose 6%.

That compared with increases of 4.9% at Gatwick, 7.6% at Heathrow, 12% at
Stansted and 16% at Southampton, and a total average rise of 7.5%.

Operating profit rose sharply at Edinburgh, from £13m to £16m, and Aberdeen,
from £5m to £6m, while Glasgow's profitability edged up £1m to £19m.

Donal Dowds, chief executive of BAA Scotland, said that as well as passenger
growth the airports had demonstrated "excellent retail performance and
effective control of costs".

He added: "The growth of traffic reflects the success of our route
development fund which has delivered a number of new services, which in turn
means growth in airport charges income is slowed down through the discounts
in charges offered to airlines launching new routes."

BAA Scotland is spending £500m on projects under way or complete at the
three airports.

Group-wide, BAA posted an 11.4% rise in operating profit to £391m, profit
before tax and exceptionals was up 18.3% to £369m, and the group said it was
on course for 6% annual growth in passenger numbers.

BAA was playing down the 30% rise in operating profit from £24m to £31m at
Stansted, where the authority is fighting a court battle with low-cost
carrier Ryanair over the imposition of a fuel cost levy which the airline
has branded excessive and unlawful.

BAA has made a provision of £7m for unpaid charges by Ryanair, though it is
also recognising them as £7m of income. Separately, low-cost operators are
objecting to BAA's development plans for Stansted as being too costly, with
one claim that the expansion could be achieved at "a tenth of the budget".

Meanwhile, Ryanair was yesterday unveiling its own results, which showed
better than expected profits and a lower than expected decline in yields.

Duncan Bonfield at BAA commented that Ryanair must be "pleased with its
figures". He said the improvement in profitability at Stansted had been
heightened by a non-recurring cost item last year, while the yield had
improved because of higher charges as discounts for new routes came to an
end. "We are certainly not charging up to the (regulatory) cap, and we won't
do until 2007."

On construction costs at Stansted, Bonfield said: "BAA is responsible for
about 1.5% of UK construction industry turnover, I would say we know more
about construction and its costs than most people. I am not sure Ryanair has
actually built anything of any size or scale." 

He added: "We are not interested in building a high-cost facility either,
that is not in our interests." Much of the investment was in the necessary
road and rail link expansion. "Passengers have got to get to the airport in
the first place," Bonfield said.


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