No-frills traffic boosts BAA results

The UK airport operator, BAA has posted improved profits for the third quarter of £149 million, and says it remains positive for further gains. BAA chief executive Mike Clasper said profits have risen 8% year-on-year in the quarter because of increasing passenger numbers and good retail performance. He also said costs had stayed on target. This includes the construction of Terminal 5 at Heathrow, which cost the group £519 million during the third quarter to December 31. BAA’s revenue rose 8.1% year-on-year to £455 million over the quarter, which was boosted by regulatory price increases at Heathrow and Gatwick, as well as increased retail spending by passengers. This was primarily spending by longhaul passengers at Heathrow and those departing from Terminal 3, as well as increased spending by passengers at Stansted. On average, retail income per passenger was £4.36, up from £4.23 in the same quarter in the previous year. Passenger traffic increased 5.6% to 31.8 million passing through BAA’s UK airports in the third quarter. The largest growth was at Southampton, where traffic rose 76.7% due to an increase in no-frills flights with carriers like Flybe. Stansted also posted continued strong growth of 19.5%. BAA said that passenger traffic growth at Heathrow of 3.4% to 15.9 million, was a sign that the economy is slowly recovering and the airline industry is getting over the impact of the Iraq war and Sars epidemic.