British Airports Authority Reports £316 million Loss
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The British Airports Authority, who owns the Stansted, Gatwick, and Heathrow airports, said yesterday that their pretax loss for the first quarter worsened even while revenue increased by 15 percent year-on-year as cost control, retail income, and high tariffs helped to offset lower numbers of passengers. Revenue for the quarter increased from £450.7 million last year to £522 million, while aeronautical income rose by 32 percent despite a reduction by 10 percent in passenger volumes.
The pretax loss during the first quarter worsened from £55.6 million last year to £316.2 million. This is mainly blamed on the depreciation of assets following the opening of Terminal 5 at the London Heathrow Airport, as well as the non-cash impact of market valuation of derivatives. The British Airports Authority said that operating profit declined by 57 percent from £25.8 million last year to £11 million because of charges related to accelerated depreciation in value for two Heathrow terminals due to the development of Terminal 2A, as well as their defined benefit pension plan.
Colin Matthews, the chief executive of the group, said that the rest of 2009 will be tough and will bring about further challenges. However, their concentration continues to be on increasing their standards of service and improving efficiency, he added.
Meanwhile, the British Airports Authority says that they have received many bids for the Gatwick Airport, and they anticipate to make an announcement for the outcome in a few weeks. The group has been forced by the Competition Commission to sell Gatwick and Stansted airports, as well as one of either Edinburgh or Glasgow airport in Scotland.
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