Passenger growth sees BAA profits soar 25%

Published on Monday 2 August 2004 13:39

BAA, the biggest airport operating group in Britain, today reported a 25.2 per cent hike in first-quarter profits to £159 million as record numbers of passengers returned to the skies following last year’s slump.

The figure was close to the top of the range of analysts’ forecasts for between 135m and 165m.

BAA, which runs Edinburgh, Glasgow and Aberdeen airports, said passenger numbers at UK airports were up 9.7 per cent in the three months to June 30 to 35.9 million.

Heathrow and Stansted led the change with increases of 11.3 per cent and 15.8 per cent respectively, as demand for long-haul and low-cost flights grew. The company said group revenue over the quarter powered ahead by 11.3 per cent to 534m, while operating profit rose 18.2 per cent to 175m.

Mike Clasper, the chief executive of BAA, said that the encouraging start to the year gave the group confidence "our performance is on track for the year".

Revenue at its UK airports business, which includes newspaper and confectionery retailer World Duty Free, was up by 11.2 per cent at 498m.

Earlier this month BAA issued figures which showed its three Scottish airports had seen passenger numbers up by 6.3 per cent in June to 1.81 million, with Edinburgh recording an increase of 7.7 per cent to 721,000.

As BAA draws its income from take-off and landing fees, car parks, retail rent, airport advertising and its duty-free shops, it is not as sensitive to economic cycles as the wider aviation sector.

The airline industry has been steadily recovering from last year’s woes, when the effects of the Iraq war, the Sars virus and a global economic downturn caused a drop in passenger numbers.

BAA said the building of a new fifth terminal at Heathrow was ahead of schedule and on budget. It is expected to open in 2008.