Gatwick sale and pension charges hit BAA

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The Independent Travel

BAA's London airports racked up annual losses of £822 million today after the sale of Gatwick and one-off pension charges hit the business.

The Heathrow and Stansted owner was also affected by a 3.8% drop in passenger traffic, but reported an improved operational performance and higher service standards, including better punctuality.

Gatwick's £1.5 billion sale in December resulted in a £277 million write-down on BAA's books, while there was also an exceptional charge worth £217.8 million relating to its defined benefit pension scheme deficit, which has increased due to changes in inflation expectations.

BAA, which ended 2009 with net debt of £8.58 billion, is making annual payments to the pension fund of £70 million until 2011.

Overall, losses spiralled to £821.9 million from £324.2 million a year earlier but, adjusted for exceptional items, the loss improved by 17.5% to £156.5 million.

Revenues were up 8.3% to £1.98 billion as a result of a strong retail performance and higher airport tariffs. Today's figures exclude BAA's other airports at Glasgow, Edinburgh, Aberdeen and Southampton.

Chief executive Colin Matthews said the operator planned to invest more than £1 billion this year to upgrade its airports.

He added: "We expect 2010 to present further economic challenges for the industry as a whole, and we will remain focused on improving our efficiency and the service we offer customers."

The company said Heathrow delivered the most resilient performance of the major European airports after passenger numbers declined 1.5% to 65.9 million last year.

Helped by strong demand from areas such as India and the Middle East, Heathrow's performance improved as the year progressed, with growth of 0.3% and 1.1% in the third and fourth quarters of 2009 respectively.

At Stansted, passenger traffic declined by 10.7% to 20 million, but this included an improvement in the final quarter to show a 5.7% decline.

In terms of operational standards, the proportion of aircraft departing Heathrow within 15 minutes of schedule increased to 77% from 69%, despite the adverse weather conditions in December.

The proportion of baggage not accompanying passengers on their journeys almost halved, while 97.9% of passengers passed through security in less than five minutes.

In October, BAA announced it had sold Gatwick to US-based investment fund Global Infrastructure Partners, which already owns London City Airport.

Earlier in the year, the Competition Commission ruled that BAA must sell Gatwick, Stansted and either Glasgow or Edinburgh, a decision that BAA successfully challenged on grounds of apparent bias. The Commission said this month it was seeking leave to take the matter to the Court of Appeal.

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