BAA expects air travel to pick up later in year

BAA says it expects passenger traffic to pick up later this year as the aviation industry emerges from the "toughest conditions for a decade".

Chief executive Mike Hodgkinson says that while the summer months are likely to be slow, the number of passengers should climb strongly in the second-half.

The September 11 terrorist attacks hit passenger volumes at BAA's seven UK airports, with traffic on North Atlantic routes dropping by 38%.

The fall-out from the US attacks and the UK's foot-and-mouth disease outbreak meant BAA's full-year pre-tax profits were £505m (€786m) before one-off costs, down nearly 8% from £547m (€851m) last time.

After one-off costs, BAA's pre-tax profits were £318m (€495m), down 42% from £548m (€853m).

BAA's UK airports, which include Heathrow and Gatwick, handled 121.9 million passengers in the year, a fall of 2.2%. This meant revenues across the business fell by 1.8% to £1.87bn (€2.9bn).

Mr Hodgkinson says: "September 11 represented a major setback for the industry worldwide, but BAA has risen to the challenge."

He says the group's retail business achieved a 2% increase in revenues despite the fall in passenger numbers. On average, each passenger spent £3.95 (€6.15), up from £3.78 (€5.90).

The growth of no-frills airlines Ryanair, Go and easyJet helped passenger volumes at Stansted rise by 14.9%, while BAA's Scottish airports - Aberdeen, Glasgow, and Edinburgh - recorded a 7% increase.

Mr Hodgkinson says: "The industry is restructuring, with some airlines having gone out of business and others doing better than before. However, aviation remains fundamentally a long-term growth business."