BAA earnings up after 'robust' year

Airports operator BAA said it delivered a “robust” financial performance in 2010 despite disruption caused by volcanic ash, strikes and snow.

The owner of Heathrow and Stansted airports reported a 9% rise in underlying earnings to £966.9m (€1.1bn) and said losses including one-off items narrowed to £316.6m (€377m) from the £821.9m (€979m) recorded a year earlier.

And with improved passenger growth at Heathrow over the second half of the year, BAA said it was on course to deliver a strong increase in profitability this year as it looks to deliver additional investment in facilities.

Chief executive Colin Matthews said: “We delivered a robust financial performance in 2010, despite the volcanic ash, strikes and snow that affected major airports across Europe and North America.

“Strong passenger growth at Heathrow in the second half of the year reflected the ongoing improvement in the global economic climate.”

BAA, which was criticised by airlines following disruption to services caused by December’s snow, said combined passenger traffic at Heathrow and Stansted declined 1.8% to 84.3 million due to the one-off factors last year.

At Heathrow, traffic declined 0.2% to 65.7 million but adjusted for the exceptional events the figure is estimated to have increased by up to 3.4%. Stansted’s reported traffic declined 7% to 18.6 million due to airline capacity reductions and economic uncertainty, as well as the ash cloud and weather.

BAA is facing the sale of Stansted and one of its Scottish airports after it lost a bid to appeal against an order made by the Competition Commission.

It argued that circumstances have changed significantly since the regulator ordered the sell-off, particularly in light of the coalition government’s move to rule out any new runways in the south-east of England.

Gatwick’s £1.5bn (€1.8bn) sale in December 2009, which stemmed from the Commission’s ruling, resulted in a £277m (€330m) write-down on BAA’s books for 2009, when BAA also took an exceptional charge worth £217.8m (€259m) relating to its defined benefit pension scheme deficit.

Today’s results, which relate to the company’s ownership of Heathrow and Stansted, show net debt increased 15.6% to £9.9bn (€11.8bn).