BAA announces 10-year forecast and April traffic

Emily Pacey

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The UK airports group has revealed its estimates of traffic growth over the next decade, as well as its plans for investment at its three London airports

The group predicts that annual traffic growth at Heathrow will average 2.33% over the next ten years, falling from 3.2% in 2005–6 to 1.2% in 2015–16. Passenger growth at Gatwick will also decline, from 3.8% in 2006–7 to 0% by 2015–16. Stansted is the only one of the three airports forecast to experience traffic growth, peaking at 17.7% in 2015–16 when BAA expects to open a second runway at the airport.

Predicting a 4% rise in passenger demand in the London area over the next ten years, BAA calculated that because of planning restraints it would have the capacity to absorb only 3% of the new passengers. This would leave a surfeit of 1% unmet passenger demand at its London airports, or 19m "lost" passengers per year. However, the group said that the extra demand could act as a buffer against unforeseen hikes in oil prices or measures inflicted to reduce the environmental impact of aviation, such as taxation.

The group plans to invest about £9.5bn ($17.7bn) in renovations and expansions at Heathrow, Gatwick and Stansted airports between now and 2016. Gatwick will receive £850m ($1.6bn) and complete a project to reduce landside retailing and correspondingly expand airside retailing at the south terminal. BAA also plans to increase the north terminal's capacity, but did not say whether retail there would be affected. Under existing estimates, Stansted will receive £2.5bn ($4.7bn) of investment, the major elements of which will be the expansion of the current terminal facilities and the construction of the airport's second runway. In November 2005 BAA announced its plans to demolish London Heathrow T2 and replace it with a new £1.5bn ($2.8bn) terminal called Heathrow East, in time for the 2012 Olympic Games in London. This, plus the completion of T5, will absorb most of the planned £6.2bn ($11.6bn) due to be invested in the airport over the coming decade.

At its other airports, BAA forecasts 3.9% passenger growth overall. Aberdeen is predicted to grow by 3.1%, Edinburgh by 8.8%, Glasgow by 8.9%, Southampton by 2%, Naples by 4.7%, and Budapest by 8.7%. The group plans to invest about £80m in these airports in 2006-7.

BAA has also announced its traffic figures for April. The group's seven UK airports welcomed 12.4 million passengers in April, an increase of 7.8% on the previous year. Combining the results for March and April, which eliminates the impact of the late Easter, reveals an increase of 3.2% over 2005.

Once again, long haul flights (excluding North Atlantic traffic) performed best, growing by 15%. European scheduled traffic also recorded strong growth, up by 10.8% on the same month last year. Domestic traffic was the only segment to suffer a decline in growth, down by 1.3% compared to April 2005. However, European charter traffic not only halted its long-term decline, but climbed back into positive growth of 4.2% in April.
 
At individual airports, Stansted performed best, welcoming 16.2% more passengers in April than in the same month last year. Traffic at Gatwick rose by 12.5%, while Heathrow's traffic increased by 4.3% to 5.8m. 

In Scotland, Aberdeen recorded its fifth successive double-digit traffic increase, this time by 10%. Glasgow and Edinburgh airports showed more modest growth of 2.2% and 1.7% respectively. At Naples airport passenger volume rose by 14.9%.