Airport News - May 2008

BAA Loss After Airport Security Costs

Posted by Paul Fiddian on 28/05/2008 - 14:07:22

It has emerged that airport operating group BAA made a loss between January-March 2008.

The loss comes after the group, which owns seven airports in the UK, took on extra security workers and spent more on maintenance, although passenger numbers in the first quarter were healthy.

Heathrow, Gatwick, Stansted Values

BAA is the owner of London Heathrow, London Gatwick and London Stansted airports, the values of which it has downgraded by £97 million.

Consequently, BAA lost £62 million between January and March this year, compared to an £89 million profit for the same period in 2007.

This, even though 0.9 per cent more passengers passed through its airports.

BAA Chief Executive, Colin Matthews, stated: “Our operating profit was clearly affected by higher security and maintenance costs, reflecting the importance we place on delivering a safe and convenient service to passengers, through higher standards and better facilities."

Airport Security Workers

BAA, he added, took on 2,200 more security workers - primarily between July-December 2007 – in order to reduce passenger waiting times, and to put in place more stringent security enforcements.

Heathrow Terminal 5

Costs also arose at Heathrow Terminal 1 and Terminal 2, which carrier British Airways is leaving, and at Terminal 5, which opened in March.

Given, however, that Terminal 5’s opening coincided with the end of the first quarter, the financial implications of the chaos that beset it during its initial days of business are, as yet, unpublished.

BAA is fighting in order to refinance debt to the tune of £10 billion.

UK Airport Ownership

The Competition Commission recently ruled that BAA’s UK airport ownership is not in the interests of competiveness, and is contemplating making the group split its seven-strong airport collective up.

Aside from Heathrow, Gatwick and Stansted, BAA also owns Edinburgh, Aberdeen, Glasgow and Southampton airports.

Source – Airport International’s London Reporter

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