BAA losses narrow despite hits from ash and BA strike

The airports operator BAA revealed narrowed first-half losses yesterday despite the impact of the volcanic ash cloud and the British Airways cabin crew strike.

Passenger numbers dropped by 4.5 per cent to 38.7 million at the Ferrovial-owned group's Heathrow and Stansted airports in the six months to the end of June. And the week-long closure of European airspace because of ash cost the company £36m. But BAA's revenues rose by 2.2 per cent to £958m, and the group's loss of £260m was a 34 per cent improvement on last year's £392m.

The biggest boost came from a 10 per cent rise in retail income per passenger at Heathrow and Stansted, helped by a £1bn annual capital investment programme at the hub airport, the company said.

Colin Matthews, the chief executive, stressed that investment in Heathrow will continue despite the coalition Government's scrapping of plans for a third runway at the congested hub.

"We have huge construction programmes under way at Heathrow terminals which are of huge significance for the airport with two runways, and also for the country as a whole, in the context of constrained government expenditure," Mr Matthews said.

BAA stressed that the cancellation of plans for a third runway will have no adverse impact on its debt investors, and also said that plans for a direct high-speed rail link to Heathrow will increase demand at the London airport from British fliers currently travelling via other European hubs.

Within the group's total revenues, aeronautical income fell by 1.1 per cent, while gross retail income rose by 2.8 per cent and "other" income – including the Heathrow Express rail link – shot up by 9.6 per cent.

The UK domestic market saw the most savage declines in the six months to June, with passenger numbers down by 13.5 per cent to just 3 million at BAA's two London airports. The company blamed BA's focusing of strike-induced service reductions on its domestic network. Excluding the BA strikes, passenger traffic at Heathrow would have increased by 2.3 per cent, BAA said.

The airports group faces industrial relations issues of its own with the Unite trade union. Some 6,000 BAA employees are being balloted about possible strike action in a row over a pay offer derided by Unite as "paltry".

EasyJet weathers the storm

EasyJet's third-quarter revenues rose by 5.3 per cent to £759m, despite an 8 per cent drop in passengers blamed on the volcanic ash cloud. The total cost of the ash disruption was £65m, as the budget carrier cancelled 7,314 flights, the company said.

It also reiterated full-year profit forecasts of between £100m and £150m.

EasyJet came in for sharp criticism last weekend after data from its Gatwick hub showed less than half its flights took off on time, a worse record than Air Zimbabwe. Its newly appointed chief executive Carolyn McCall said yesterday that improving punctuality is a top priority for the company.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Stockbroker

£Basic (OTE) + Uncapped Commission: Guru Careers: A Stockbroker (qualified / p...

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence