"BAA boosted by cheaper airfares"

Tuesday, November 2, 2004

BAA boosted by cheaper airfares
United Kingdom - The BBC


A "robust" summer, thanks to cheaper airfares and stronger economies, have
helped drive up profits at airport operator BAA. 

The group said pre-tax profits for the six months to September rose to
£363m, up 16.3% on the same period last year. 

The number of passengers passing through its seven airports jumped 7.5% over
the period to 77.5m. 

But, BAA is facing a number of costs - including a dispute with Ryanair over
alleged non-payment of airport fees. 

The group said it had invoiced Ryanair for £7m over the matter, adding:
"Given the current litigation with Ryanair, a £7m provision has also been
established." 

BAA was also forced to write off £6m during the period to meet Heathrow
Express check-in costs, after two airlines said they would cease to use the
facility. 

Improving market 

The company has benefited from the steady upturn in the aviation industry,
which was hit last year by the effect of the Iraq war, Sars outbreak and a
global economic downturn. 

The group has also escaped the effects of rising oil prices which have been
squeezing airlines in recent months, as it makes its money from airline
landing and takeoff fees, airport advertising, retail rent, car parks, and
its duty-free shops. 

Breaking down figures for each of its airports, BAA said the number of
passengers using Heathrow rose 7.6% to 35.8 million - mainly down to a rise
in long-haul and North Atlantic passengers. 

The popularity of no-frills travel lifted numbers at Southampton and
Stansted by 16.9% and 10.1% respectively, while all of its Scottish airports
also posted growth in traffic numbers. 

Challenges ahead 

Elsewhere, Gatwick passenger numbers grew 4.9%, with an increase in European
scheduled traffic helping to offset a dip in the European charter market. 

Net retail income from BAA's seven UK airports jumped 9.1% to £312m. 

However, despite the positive figures, chief executive Mike Clasper warned
that BAA will face challenges. 

"We also face the continuing challenge of difficult industrial relations
across much of the aviation industry," he said. 

Gatwick has been hit by several walkouts by its ground staff, while Heathrow
was narrowly spared from action by 10,000 British Airways staff over the
summer which would have hit BAA's earnings.

Attached Photo:

Cheaper fares lured more passengers into travelling

_40479489_heathrow2_pa.jpg