BAA forecasts 6% air travel growth

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BAA, the owner of Heathrow, Gatwick and Stansted, produced a bullish forecast yesterday of demand for air travel, predicting passenger growth this year of more than 6 per cent at its UK airports.

BAA, the owner of Heathrow, Gatwick and Stansted, produced a bullish forecast yesterday of demand for air travel, predicting passenger growth this year of more than 6 per cent at its UK airports.

The forecast came as the group, which operates seven UK airports and has concessions to run a dozen overseas, reported a 2.3 per cent increase in underlying pre-tax profits last year to £536m.

UK passenger numbers rose 4.4 per cent to 133.4 million.

The increase in profits came on the back of a 5 per cent rise in revenues to £1.97bn, boosted by a strong performance from airport retail concessions and an 11 per cent increase in landing charges at Heathrow, where profits rose 7 per cent to £364m.

Mike Clasper, BAA's chief executive, emphatically ruled out a reduction in landing charges for bmi and Virgin Atlantic despite threats of legal action against it. The two have protested that they are forced to pay excessive charges to finance the £4.2bn development of Terminal Five which will be used exclusively by British Airways and its partners in the Oneworld alliance.

However, Mr Clasper said there was no question of BAA introducing differential tariffs, pointing out that Virgin would benefit from the £450m being spent to prepare Heathrow for the A380 superjumbo, even though the investment was borne by airlines such as BA which had not ordered the plane.

He said "productive discussions" were taking place with bmi and its partners in the rival Star alliance about improving Heathrow's Terminal One, which is expected to become their base when BA moves to T5.

Mr Clasper said BAA backed the "lighter touch" approach advocated last week by the Civil Aviation Authority, designed to allow airport operators and airlines more scope to agree on landing charges and service levels between them.

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