BAA reports robust retail revenue despite fall in passengers

Nicole Mezzasalma

Print Article E-Mail Article E-Mail Author

Net retail income per passenger for London Heathrow, London Gatwick and London Stansted airports has grown by 3.1% compared with the first nine months of 2007

Airports operator BAA has announced its results for the nine months to September 30 2008, highlighting “robust retail activity”. Overall revenue was up by 15% to £1.92bn ($2.9bn) compared with the previous corresponding period, while adjusted EBITDA increased marginally to £822m ($1.23bn). Passenger traffic in the period fell by 1.9% to 117.9m.

BAA said in a statement that retail activity at London Heathrow, London Gatwick and London Stansted airports has remained “robust”, with net retail income up by 1.3% to £420m ($631.6m) compared with the first nine months of 2007. “In terms of individual airports, growth was strongest at Gatwick, which recorded a 6.2% increase in net retail income, while by retail activity, tax- and duty-free, airside specialist shops and catering saw robust year-on-year performances,” said the statement. “Heathrow net retail income was flat year on year, although in-terminal performance has been strong with an increase of 3%, which was offset by a decline in car park income owing to a mode shift towards public transport and a decline in domestic passenger traffic.”

The company added: “Net retail income per passenger for the three regulated airports has grown by 3.1% compared with the previous year and this was driven by strong in-terminal performance specifically at Gatwick and Stansted. The South terminal departure lounge reconfiguration project at Gatwick has helped to improve security flow and the layout of the retail area.” Income per passenger at Heathrow was up by 0.7% to £4.52 ($6.79), rose by 6.3% to £4.47 ($6.72) at Gatwick and increased by 2.3% to £3.81 ($5.73) at Stansted.

The statement also mentioned the overhaul of Glasgow Prestwick airport, where a £31m ($46.6m) extension project, due to be completed by spring 2009, will result in “state-of-the-art security, more space to relax, and bigger and better shops”, and the sale of Gatwick airport, which the company expects to conclude in the first half of 2009.

BAA CEO Colin Matthews said: “BAA has delivered a resilient performance with results in line with forecasts. With trading conditions expected to remain challenging in the coming months, we are maintaining our sharp focus on operational improvement and a substantial programme of capital investment, which will lead to better passenger service standards and lower costs.”