BAA says profits will drop by 20%

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The turmoil in the travel markets is expected to lead to a 20% drop in profits at the UK airports group BAA, chief executive Mike Hodgkinson said at a reception at the Labour Party conference yesterday.

In view of speculation in the press the company issued a statement to clarify the position. "The advanced release of September traffic figures yesterday showed that overall passenger traffic at BAA airports year on year fell by 6% in the month of September. For the period after the terrorist attacks on 11 September, traffic fell by 10.6%", said BAA. The figures also show that at London Heathrow pasenger volumes dropped by 21.7% year-on-year in the first seven days after the attacks and were running 20.4% lower in the five days up to September 30.

BAA reiterated its position that it is too early to forecast the ongoing traffic levels, and that a formal trading update will be issued with its interim results later this month. But on current trends it expects the hijackings to have a similar impact on profitability as the Gulf War.

"Should the resulting impact on traffic and costs be similar to that experienced during the Gulf War in 1991, then profits could be reduced by around 20% in the current financial year. But it is far too early to tell whether this will in fact be the case." BAA said detailed analysis by market will be made available at a later date.