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Passenger fall hits BAA profits | |
(about 4 hours later) | |
Airport operator BAA has said its 2008 profits fell by 18.4% as the economic downturn dented passenger numbers. | |
It reported an profit of £582m before tax and interest, down from £713m in 2007, as 2.7% fewer travellers went through its seven UK airports. | |
It added its sale of Gatwick Airport was on schedule, with initial bids received from potential buyers. | |
However, BAA made no comment on the sale of Stansted, which is expected after a Competition Commission ruling. | |
Warning of another "challenging" year, BAA chairman Colin Matthews said "its performance was affected by a drop in passengers, which reflects the general economic situation". | |
A company spokesman said that higher staff wages and costs associated with Terminal 5 had also played a part in the profit fall, which came despite revenue rising 14.3% to £2.59bn. | |
The operating profit - which includes exceptional costs and a revaluation of the business's investments - was £23m, down from £476m in 2007. | |
Potential bidders | Potential bidders |
In December last year, the Competition Commission said BAA - which is owned by Spanish firm Ferrovial - had to sell off three of its seven UK airports, including two in south-east England and one in central Scotland. | |
The commission said its decision was subject to a final consultation, with its final report due in late February or early March. | The commission said its decision was subject to a final consultation, with its final report due in late February or early March. |
BAA'S AIRPORTS HeathrowGatwickStanstedSouthamptonEdinburghGlasgowAberdeen | BAA'S AIRPORTS HeathrowGatwickStanstedSouthamptonEdinburghGlasgowAberdeen |
However, BAA has ruled out the sale of Heathrow, indicating that Stansted could be up for sale as well as Gatwick. | However, BAA has ruled out the sale of Heathrow, indicating that Stansted could be up for sale as well as Gatwick. |
It will also have to dispose of either Edinburgh or Glasgow airports. | It will also have to dispose of either Edinburgh or Glasgow airports. |
The sale of Gatwick was expected to be completed in the first half of this year, BAA said. | The sale of Gatwick was expected to be completed in the first half of this year, BAA said. |
BAA had put Gatwick on the market following the Competition Commission's initial report in August. | |
Several firms are said to be interested in the airport - which is expected to sell for up to £1.8bn. | Several firms are said to be interested in the airport - which is expected to sell for up to £1.8bn. |
Finance difficulties | Finance difficulties |
It was likely that if Stansted was put up for sale, would-be bidders would be the same firms that had shown interest in Gatwick, said analyst Douglas McNeill of Blue Oar securities. | It was likely that if Stansted was put up for sale, would-be bidders would be the same firms that had shown interest in Gatwick, said analyst Douglas McNeill of Blue Oar securities. |
But he added the sale price would be less than that achieved in more buoyant economic times. | But he added the sale price would be less than that achieved in more buoyant economic times. |
"Airport takeovers require debt finance to a large degree, which is extremely hard to come by at the moment," he told the BBC. | |
Stansted saw the worst level of passenger falls at its London airports, down 6%, with the collapse of airlines such as business class carriers Maxjet and Eos. | |
And Ryanair and Easyjet have been scaling back the number of flights they operate from the airport, saying that the fees they are charged make it too difficult to turn a profit. | |
Gatwick was affected by the failure of XL Leisure, Zoom and Sterling airlines, pushing passenger figures 2.8% lower. | |
Meanwhile, at Heathrow, growth in long-haul traffic partially offset weaker domestic business, taking the overall passenger downturn to 1.4%. |
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