Threatened strike by pilots costs BAA pounds 10m

The threatened all-out strike by British Airways pilots contributed to a fall in passenger numbers at Heathrow last month, according to the airport's operator, BAA.

The company, which operates Heathrow, Gatwick and Stansted, estimated that, compared with July last year, 75,000 fewer passengers used its airports last month because of the planned industrial action.

The strike was to have begunin the second week in July, but was called off after the pilots' union reached agreement with British Airways management. The disruption has reportedly cost the company pounds 10m. BAA said that worried passengers had re-booked to travel through Amsterdam and Frankfurt.

Some 5.3 million passengers used Heathrow last month, a fall of 0.3 per cent over the previous year. But discounting the impact of the strike, and the fact that July this year included four rather than five weekends, volumes at Heathrow would have risen by 1.5 per cent.

BAA said Heathrow was also depressed by British Airways' policy-shift away from offering many heavily discounted seats. BAA's research director Stan Maiden said: "Scheduled airlines are recognising that they can make more money by raising their incomes, rather than putting on extra capacity, which they have to sell at a discount. We expect this situation to continue through August."

A drop in charter passengers has taken its toll on traditional package holiday airports, such as Glasgow and Gatwick. There was a 14.6 per cent fall in charter passengers as tour operators cut capacity to try to repair battered profit margins after a series of damaging price wars. Glasgow Airport was worst hit, with passenger numbers falling by 7.4 per cent.

Overall, BAA's passenger volumes rose by 1.3 per cent to 9.7 million. The biggest increase was at Stansted, with a 17 per cent rise in July to half a million. Tra-vel to the Irish Republic was the main factor, helped by new Aer Lingus services at the airport.

BAA said that at Gatwick there was 54 per cent more seat capacity to Ireland than in July last year. Mr Maiden said: "In terms of the Republic, there is a lot of positive feedback from British travellers."