Newswatch: BAA profits begin to take flight.
Monday should see airport operator BAA report an improvement in operating and pre-tax profit for the nine months ending 31 December. BAA manages 13 airports in the UK, Australia and the US. In the UK, the group operates seven airports including Heathrow and Gatwick. Ownership and management of airport facilities are backed by extensive retail operations. The group suffered a decline in retail sales following the abolition of duty-free shopping on 1 July 1999 with British airport net retail income down by 20% in July 1999. Customer confusion was cited as the main source of the problem, with customers uncertain of the new rules. But airport retail sales picked up during September and October as customers began to understand the nature of the changes. Although tax and duty-free ended last year, BAA has continued to sell 90% of eligible items at duty-free prices. That trend is expected to have continued throughout the Christmas period. The group has also sought to dig itself out of a dip in share price. BAA boss Mike Hodgkinson has invested #163;8m to buy 5% of Internet travel company lastminute.com.