BAA Earnings Boosted By Heathrow Growth
British airport operator BAA said third-quarter earnings rose, helped by continued growth at London's Heathrow airport, where passenger traffic is holding up despite global economic uncertainty.
"Revenues rose 7.1 percent in the third-quarter and were up 8 percent at Heathrow where traffic rose 1.5 percent during the period, despite tough comparisons from a strong summer in 2010," Jose Leo, BAA's chief financial officer said in an interview on Wednesday.
"Our expectation for 2011 was to grow earnings by 15 percent and we expect to do that."
BAA, who's major shareholder is Spanish infrastructure group Ferrovial has, in recent months, reported a steady rise in traffic to emerging markets such as China, India and Brazil, and said steady growth in US traffic had also helped.
BAA, which owns Heathrow -- Europe's busiest airport -- as well as Southampton and Stansted in England and Glasgow, Edinburgh and Aberdeen airports in Scotland, said it expected the company to perform well in the coming year despite economic uncertainty in Europe and the US that analysts believe could hit passenger numbers.
"We, and many other players in our market are cautious about the coming months but Heathrow is well equipped to deal with recessions and downturns," said Leo.
"Interestingly, in the last few months we have seen over the fortnights when traffic is fundamentally leisure that growth has held up but those fortnights where traffic is fundamentally business it has softened slightly."
Business travel is traditionally more resilient than leisure travel during a downturn as cash strapped consumers cut down on discretionary spending when times are tough.
BAA last week put Edinburgh airport up for sale, bowing to a UK watchdog's order to sell a Scottish airport in order to pave the way for better competition.
After a two-year battle with BAA over whether it exerted a dominant hold on British airports, the UK's Competition Commission told BAA earlier this month that it must sell one of its Scottish airports before it disposes of London Stansted airport.
"Informally in the past we have had many approaches .. we are obviously not in the best time ever (to sell) but Edinburgh airport is performing well and is attracting a lot of interest," said Leo.
Analysts value Edinburgh airport at around GBP£600 million (USD$959 million).
BAA said a judicial review of the UK competition watchdog's ruling requiring it to sell off Stansted would take place in December 2011.
Earlier on Wednesday BAA said adjusted earnings before interest, tax, depreciation and amortisation rose 17 percent to GBP£842.2 million in the nine months to the end of September on revenues 10.2 percent higher at GBP£1.7 billion.
It said traffic at its airports rose 4.3 percent during the period, with Heathrow traffic up 6.1 percent.