Airports operator BAA has attributed strong passenger growth and the continuing popularity of air travel for higher third-quarter profits.
Pre-tax profits grew by 6% to #440m. BAA finance director Russell Walls told Accountancy Age that the fundamental growth factor for the company was the number of passengers passing through its airports.
Passenger numbers grew by 7.4% to 88 million in the third quarter of 1998, compared to 82 million for the same period in 1997. BAA is confident that figure will continue to rise.
Walls said the success of the low-cost airlines – such as EasyJet – was opening up the market, and the strength of sterling had made air travel cheaper.
For the first time this year, the increase in retail income – which grew by 7.5% – outstripped the increase in passenger numbers passing through BAA airports. But revenue could be hit by the potential loss of revenue from duty free sales, set to be abolished on 30 June.
‘To compensate for this loss we are allowed to increase landing charges,’ said BAA’s Walls.
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