Snow claims another casualty as BAA chalks up big loss

The airports operator says it lost £24m to the big freeze. Does it only have itself to blame?

by Emma Haslett
Last Updated: 19 Jul 2011
Another casualty of the pesky cold snap, and a predictable one at that: Spanish-owned airports operator BAA said today that it lost £24m as a result of the snow grounding hundreds of flights just before Christmas. The worst-affected airport, Heathrow, lost a painful £19m. The big question for BAA and its shareholders, though, is whether management could have done more. After all, £24m buys you a lot of snow ploughs.

According to figures released by BAA today, a total of 7.2m passengers used its six airports during December – 10.9% fewer than during the same month in 2009, and 0.6% lower than expected. Heathrow itself saw 4.8m passengers pass through, 9.5% lower than the previous year. But while it might have suffered the most financially, other airports saw bigger drops in passenger numbers: Edinburgh sank 18.4%, while Glasgow fell by 15.3%, Stansted dropped by 10.9% and Aberdeen was down by 8.3%.

BAA has already had complaints from the airlines, who were quick to point out that while Heathrow was buried under a blanket of snow, nearby Gatwick (which was sold by BAA in 2009 as part of an agreement with the Competition Commission) managed to operate relatively normally. In fact, so incensed was Virgin Atlantic that last week, it refused to pay its operator fees to BAA until it sees the results of an inquiry into the chaos (not due until March).

The problem, some say, is that - unlike Gatwick - BAA failed to invest sufficiently in snow ploughs and de-icing equipment. Now in terms of preparation, this is clearly a difficult balancing act for any infrastructure operator: heavy snow may have caused chaos twice last year, but it's still a relatively uncommon occurrence in the UK. On the other hand, BAA is particularly sensitive to charges like this, because there's already a perception that Spanish owner Ferrovial is more worried about servicing its massive debts than investing in our airports. The fact is that it simply can’t afford to keep having fiascos like this – particularly at Heathrow. We just can’t have the UK’s most important transport hub brought to a standstill for avoidable reasons – and if BAA doesn’t wise up to this fast, the Government is likely to make it.

BAA CEO Colin Matthews naturally begs to differ, pointing out that the BAA is currently going through a ‘£1bn-a-year investment programme’. Our advice would be that as well as ‘winning back confidence, upgrading our terminals and doing whatever it takes to improve people’s journeys’, he might want to squeeze a couple of snow ploughs into that budget. It'll probably save money in the long run, as well as appeasing some of those disgruntled airlines.

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