700 jobs to go as airport profits rise

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The Independent Online

Around 700 job losses were announced today at the three biggest airports operated by BAA as part of plans to save £45 million a year.

BAA said back office and management roles would be removed at Heathrow, Gatwick and Stansted - but it insisted there would be no cuts in frontline security staff.

Details emerged as BAA posted improved results for the six months to September 30 despite the impact of wildcat strikes at Heathrow and the London bombings.

BAA said it also overcame the impact of a slowing UK economy on consumer spending and travel plans to report a 9.6 per cent increase in underlying operating profits to £412 million.

Retail sales at its seven UK airports including Gatwick and Stansted rose 3.8 per cent to £324 million in the first half - a better performance than many high street chains, which have suffered from a sharp fall in footfall.

Combined with a 2.5 per cent rise in the number of passengers passing through its airports and higher landing fees, this helped overall revenues to rise by 6.4 per cent to £1.17 billion.

BAA refused to rule out compulsory redundancies and said the job losses were vital to counter a string of threats to its business.

These threats included passengers spending less in its shops, airports becoming more crowded, staff morale deteriorating and an inability to eliminate out-dated working practices before the new Terminal 5 opens at Heathrow.

A spokesman for BAA said: "Of course, we will look to redeploy staff where there is a reasonable prospect of doing so.

"But it will quickly be apparent where this will not be possible, and those who cannot be placed will have to leave."

The job cuts form part of a restructuring programme known as Delivering Excellence, which is expected to be completed by the end of 2007/8.

"At that stage the organisation will be leaner, better managed and appropriately positioned to deliver excellent and consistent customer service effectively and efficiently," BAA said.

Around £3 million of savings are expected to come on stream in the current financial year, rising to £45 million in three years' time.

BAA added that changes in its supply chain, IT, human resources and capital projects at its three biggest airports were already well under way.

Details emerged as chief executive Mike Clasper reiterated the view that the number of passengers passing through Heathrow and other UK airports this year should rise by around 3 per cent.

This was despite a string of setbacks in the first half, including the wildcat strikes which paralysed the operations of BAA's biggest customer.

British Airways was forced to suspend flights for more than 24 hours after baggage handlers walked out on August 11 in sympathy with sacked workers at airline caterer Gate Gourmet.

With people also wary about travelling to and from London in the wake of the terrorist attacks on July 7, passenger numbers at Heathrow were flat at 35.8 million.

But traffic was higher at all its other airports at Gatwick, Stansted, Southampton, Aberdeen, Edinburgh and Glasgow.