Business World

Saturday 16 December 2017

BAA reveals £40m hit from disruption

BAA has revealed a revenues hit of more than £40m at Heathrow and Stansted following the volcanic ash crisis and BA strike action.

The blow followed severe disruption from the ash cloud, closing Heathrow and Stansted for six days in April, while BA's strike woes and wintry weather at the start of the year added to troubles.

But BAA said it was not expecting 2010 earnings to be more than £10m lower than originally forecast, thanks to cost cutting and forecasts for improving passenger traffic and revenues.

The group is predicting underlying earnings of £946m in 2010, despite the slump in passengers due to the industry's tough start to the year.

BAA revealed last month that the ash cloud saw the number of passengers at Heathrow fall by 20.8pc to 4.4 million in April, while Stansted dropped 24.4pc to 1.2 million.

Over the first five months of the year, the decline in passenger traffic was 5.3pc to 31.1 million across the two airports.

It said 2010 figures were likely to show a 1.6 million decline due to the ash cloud and an estimated one million loss in passenger numbers due to the ongoing industrial airline action and snow.

But it hopes this will be partly mitigated by expected growth of one million more passengers passing through the two major UK airports this year, particularly long haul fliers at Heathrow this summer.

BAA said 2010 earnings were still due to be 7pc higher than 2009 despite the £40m impact.

It is also hoping to benefit from a boost in shopping at its airport retail outlets as passengers take advantage of the weak pound to the dollar.

BAA claimed its service standards had improved after a dire past few years, mired by baggage difficulties after Heathrow's Terminal Five opened in 2008.

It said on an underlying basis that it was making inroads on lost luggage, although BAA admitted it had failed to see a decline in the proportion of baggage not accompanying passengers in the first three months of 2010, due to the effect of winter weather.

This also impacted the proportion of aircraft departing Heathrow within 15 minutes, down to 72.4pc at Heathrow from 76.6pc year earlier and down to 79pc at Stansted from 81.7pc.

Press Association

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