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War,
Sars and Pensions Batter BAA 28
July 2003 PROFITS
at London airports operator BAA slumped by more than 11% in the first
quarter as post-9/11 security costs, extra pension contributions, the Sars
virus and the Iraq war all took their toll. Chief
executive Mike Clasper conceded that the three months to the end of June
had been challenging for the company, which operates Heathrow, Gatwick and
Stansted as well as a clutch of regional airports. Pre-tax
profits for the period came in at £127m, down 11.2% on the £143m
recorded for the same period last year, and at the bottom end of City
forecasts. It was the second year running that first-quarter profits have
been hit. In 2001 they peaked at £152m. Finance
director Margaret Ewing said the cost of hiring more security staff had
shaved some £5m off profits. The company's biggest airport, Heathrow, was
badly affected by the twin blow of the Sars outbreak, which devastated
passenger traffic to and from the Far East, and the build-up to and
execution of the Iraq war, which hit transatlantic business travel. Heathrow
traffic was down by just over 2%, a loss of 350,000 passengers compared
with last year. For BAA's UK airports as a whole, traffic was up by just
over 2%. The
company remains upbeat about the rest of the financial year with traffic
growth accelerating to 3% in June and July and a forecast of 4% for the
year as a whole. Pension costs were up by £13m on last year. •
THE chaos at Heathrow last week caused by the wildcat strike by British
Airways staff has cost BAA just under £1m to date, said finance director
Margaret Ewing. That was the cost of passengers delaying or cancelling
their flights and the resulting loss of retail income. She
warned that the strike was 'not helpful at all' to the recovery at
Heathrow following the slump in traffic in the first quarter of the year. However,
the vast bulk of the cost is expected to fall on British Airways, which is
estimated to have taken a hit of £30m or more already. The
shock walkout by checkin staff resulted from a dispute over BA's new
swipe-card 'clocking on' system. Copyright
© 2002 Global Action on Aging
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