Airport revenue still flying despite gloom

Published on Tuesday 18 November 2008 08:47

REVENUES at Edinburgh Airport have continued to grow despite the economic downturn.

Airport operator BAA said income from aeronautical charges at Edinburgh increased by two per cent in the nine months to September 30, while overall revenues before exceptional items increased by four per cent.

Revenues at BAA, excluding the three London airports, increased by 15 per cent to 1.9 billion, while earnings before tax and depreciation fell by one per cent to 822m.

The increases came despite passenger traffic at BAA's airports declining by 1.4 per cent to 117.9m, in a clear sign of cash-conscious consumers travelling abroad less as the economic downturn hits home.

Colin Matthews, chief executive at BAA, said: "BAA has delivered a resilient performance with results in line with forecasts.

"With trading conditions expected to remain challenging in the coming months, we are maintaining our sharp focus on operational improvement and a substantial programme of capital investment, which will lead to better passenger service standards and lower costs."

The provisional findings of a Competition Commission report recently recommended that BAA should sell one of either Glasgow or Edinburgh Airport.

The CC also recommended that it ceases to run two of its three London airports.

And BAA said last month that it is to sell Gatwick Airport, although it said it would fight to retain ownership of both Glasgow and Edinburgh.

Today, BAA said that the controversial Terminal 5 at Heathrow Airport is now providing a "world class" service to customers.

In a statement, the company said: "BAA is committed to extending this transformation across the rest of Heathrow and its other airports over the next few years through a combination of substantial investments in modern airport facilities and improved service standards."

BAA said it expects to invest a further 4.3bn at Heathrow by 2013 and said it is "committed to transforming other airports in its portfolio".

In Scotland, BAA has recently completed a major phase of a 31m extension of Glasgow Airport which offers better security, more space and bigger shops. The overall project is due to be completed by spring 2009.

BAA also insisted that it is confident about prospects despite the decline in passenger numbers. It said: "Traffic levels have softened in recent months as the global economic outlook has deteriorated. However, experience suggests that traffic will return to levels at or above recent figures, reflecting the major economic and demographic drivers of growth in the aviation industry.

"Over the last 40 years, there have been four periods when annual rolling passenger traffic figures have declined. Negative growth has lasted no more than 12 months with renewed growth normally well established within 12 months of the trough in performance."