BAA - General Thread

[News Guru]

[textarea]Bank holiday strike threat for BAA airports

Passengers flying to or from BAA's six UK airports, including Heathrow, could face a total shutdown over the August Bank Holiday weekend. Ground staff, firefighters and security guards are expected to vote in favour of a walk-out in a strike vote due to be announced on Thursday.

BAA staff rejected an offer of a one percent pay rise last month and began balloting over strikes. Unite, representing the 6,185 workers, said strikes would be the ‘last resort’. The union must give seven days notice of any strike action, with the very busy bank holiday weekend a likely strike target according to press reports.

Like airline BA, which is also standing firm in its negotiations with the Union, BAA is refusing to back down, making strike action more likely.

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[Aviador]

The strikes are called off after BAA agreed to pay the workers a 2% pay increase along with a one off £500.

 

[News Guru]

[textarea]BAA continue refinancing with £400m bonds sale

UK airport operator BAA raised £400 million from the sale of 6.25 percent eight-year secured subordinated bonds as it seeks to refinance its debt pile taken on at the time of its takeover by Spanish infrastructure company Ferrivial. The 'class B bonds' rank after BAA’s senior debt for repayment and were priced to yield 375 basis points more than UK government notes, Bloomberg reports.

BAA issued the bonds after pledging in July to improve its ‘gearing and cost of funding’ by refinancing a £1.57 billion subordinated loan due in 2011 that pays 400 basis points more than benchmark rates. The airports operator replaced some of the debt in August with a £625 million four-year loan at a margin of 325 basis points to 375 basis points.

It plans to use the proceeds of the bond issue to refinance part of its existing bank debt, lengthening the group’s debt maturity.

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[Aviador]

BAA is reportedly selling it's stake in Naples airport for 150m Euros

 

[News Guru]

[textarea]Ferrovial plans to sell 10% of BAA

Ferrovial has said it will sell a 10% stake in UK airport operator BAA. The partial sale would help the Spanish company establish a market value for its stake, Ferrovial's chief executive, Inigo Meiras said, adding: ‘Heathrow is one of the best infrastructure assets in the world.’ Ferrial said in a statement: ‘Initially, the proposed transaction is to divest 10% of the equity,’ implying the sale may be increased at a later date.

Mr Meiras, who reaffirmed his company's long-term commitment to BAA, said the proceeds will be used to fund other investments and to pay down debts. The announcement comes a week after BAA lost an appeal against a ruling that it must sell off Stansted as well as either Glasgow or Edinburgh airport.

The Spanish company currently owns just under 56% of the consortium that bought up BAA in 2006, meaning that the planned sale would leave it as a minority investor, albeit the biggest. Quebec's state pension fund owns a further 26%, and the Singaporean government owns the rest.

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[News Guru]

[textarea]Passengers up 3.4 percent at BAA airports

BAA reported a 3.4 percent increase in passenger numbers for October, boosted by a recovery in the level of business travel. Total passenger numbers across its six airports rose by 318,000 to 9.75 million in October 2010, helped by a 1.2 percent increase in the number of flights compared to last year.

At Heathrow, BAA reported a 6.0 percent increase in flights and a 1.0 percent increase in passenger load factors, with an average 77.2 percent of seats occupied. Passenger numbers at Heathrow increased by 7.2 percent, up 410,000 to 6.1 million.

At Edinburgh passengers were up by 3.5 percent to 854,000 - the encouraging performance attributable in part to an increase in business traffic. Southampton increased by 1.0 percent (from 155,000 to 157,000) as European travel boosted figures across the group.

Passenger numbers from Stansted fell by 3.1 percent to 1.72 million, with the lower numbers pointing to depressed leisure traffic. Both Glasgow (down 7.4 percent to 662,000) and Aberdeen (down 5.0 percent to 264,000) continued to experience a period of contracting traffic.

Cargo activity remained strong with a 12.5 percent increase in tonnage handled. Heathrow outperformed this with a 14.7 percent improvement, strongly indicative of the wider national economic climate.

Colin Matthews, chief executive of BAA, said: ‘The continued strength of Heathrow reflects an upturn in global economic activity. Low sterling and interest rates make the UK a competitive place to do business. However, government spending cuts, a sharp increase in air passenger duty and an imminent VAT rise are weakening the prospects for in-bound tourism and British leisure travel.’

BAA traffic Summary October 2010:

Terminal passengers (000s) Month % change Nov 2009 to Oct 2010 % change
Heathrow 6,097.5 7.2 66,039.7 0.4
Stansted 1,720.7 (3.1) 18,812.3 (6.0)
Southampton 156.8 1.0 1,764.7 (2.1)
Glasgow 662.3 (7.4) 6,596.4 (9.4)
Edinburgh 853.5 3.5 8,729.0 (3.7)
Aberdeen 263.5 (5.0) 2,799.2 (7.7)
UK total 9,754.3 3.4 104,741.4 (2.1)

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[News Guru]

[textarea]Ferrovial hire banks for BAA stake sale

Ferrovial has hired Goldman Sachs and HSBC to sell a 10 percent stake in BAA, Britain's largest airport operator, Reuters reports, quoting ‘people familiar with the matter’. The sale process will begin this week, it adds.

The Spanish infrastructure group owns 55.9 percent of BAA. It announced the planned sale of 'at least 10 percent' in October, raising the possibility that it could sell more if the price was right. Analysts estimate the stake could fetch up to €200 million.

By allowing Ferrovial to deconsolidate the subsidiary's debt from its own balance sheet, the sale would also more than halve Ferrovial's €24.5 billion debt pile. The company said it will invest the proceeds in assets with higher growth potential than BAA.

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[Aviador]

The Travel Weekly reports that Virgin Atlantic is considering action against BAA after the UK's biggest airport was shut for four days by snow.

 

[News Guru]

[textarea]BAA passengers down 10.9% in December on snow closures

The snow and ice in December cost UK airport operator BAA £24m and saw its passengers down 10.9% on a year earlier. BAA six UK airports handled 7.2 million passengers in December, with the drop in passenger traffic almost entirely due to the severe weather.

Passenger numbers were down 9.5% at Heathrow, with all of its other airports seeing big falls in traffic. Passenger numbers at Southampton airport down 22% and Edinburgh down 18.4%.

Of the £24m loss from the snow, £19m was accounted for by Heathrow, £1m at Stansted and £4m at its other UK airports. The cost was caused by lower revenues as well as higher expenses, particularly in supporting delayed passengers, BAA said.

For the year as a whole, BAA said it had handled 103.9 million passengers, down 2.8% from 2009. However, BAA said that excluding the impact of the severe weather, and the disruption caused by the Icelandic volcanic ash cloud in April and May last year, it estimated passenger numbers would have risen 0.6% in 2010.

BAA added that Heathrow was recovering quickly from the ‘recessionary trough’ of 2009, with record passenger numbers from July to November. Without the passenger losses as a result of the snow, it is estimated that underlying performance in December was broadly flat.

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[News Guru]

[textarea]BAA passengers up 3.8%

BAA’s six UK airports handled a total of 7.5 million passengers in January, an increase of 3.8% over January 2010. Domestic traffic grew most strongly(up 8.3%), having been affected more than other markets by snow across the UK in the same month last year. European scheduled traffic was up by 2.7% and North Atlantic traffic was 3.2% higher.

Other long haul routes were up by 4.5% overall, including increases of 30% on routes to China and 10% on Indian services. It was also Heathrow’s strongest January long-haul performance in its history, with an increase of 4.6% to 5.05 million passengers. Roughly half of this increase is attributed to the bad weather in January 2010, which was also a factor at BAA's other UK airports.

Stansted was down by 5.8% on last year, although in its case the underlying reduction is estimated to have been closer to 4.5% because of a net gain from aircraft diversions in January 2010. Edinburgh recorded a 13.6% increase in traffic, bolstered by new scheduled routes to Europe and North Africa. Aberdeen was up 9.1%, Glasgow up 8.0% and Southampton up 4.8%.

At group level the number of air transport movements was up by 5.9%, with Heathrow 8.9% higher. Air cargo growth remains strong, with an 8.5% overall increase and a 9.3% gain at Heathrow.

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[News Guru]

[textarea]BAA loses airport sale appeal bid

BAA has lost its latest challenge against a ruling that it must sell Stansted and either Glasgow or Edinburgh airports. The UK airport has mounted a string of legal challenges in an attempt to keep the airports - or at least to delay their sale until the economy improves - ever since the Competition Commission ruled in 2009 that BAA must sell three of its seven UK airports. The ruling has already led to BAA selling Gatwick Airport.

The Supreme Court ruled against BAA's latest bid to stop further sell-offs. The company ad asked the court - the highest in the UK - to give it leave to appeal against a Court of Appeal decision last October that it should be forced to sell the two airports.

A BAA spokesman said: ‘We are disappointed by the Supreme Court's decision not to hear our appeal. We continue to make the case to the Competition Commission that the circumstances in which they found reason to force the sale of airports have changed significantly since early 2009 and should certainly be reviewed in the light of the Government's policy to rule out new runway capacity in the south east of England.’

The Competition Commission said in a statement that it was examining whether there had been any significant developments since the original decision in March 2009 that could cause it to reconsider. It said BAA and other interested parties had submitted their views and that it will report back with its view towards the end of next month.

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[News Guru]

[textarea]Ferrovial studying BAA stake bids

Ferrovial is still studying offers for its planned sale of a 10 percent stake in British airports operator BAA, with China's HNA reported to be a leading contender by Sky News. It cites 'people close to the situation' saying that Chinese airports operator HNA, China's fourth-largest airline group, had lodged an interest in taking a stake in BAA, though it was not clear whether it would make a firm offer.

Ferrovial wants to sell the 10 percent stake in BAA to cut its debt. Non-binding offers for the stake, last year estimated by analysts to be worth €200 million, are expected in the first half of 2011. The company currently owns 55.9 percent of BAA. By dropping its holding below 50 percent, it will no longer need to consolidate all of BAA's debt on its balance sheet.

In January, Ferrovial Chief Executive Inigo Meiras said it was in talks with infrastructure funds and sovereign wealth funds, as well as pension funds from the US and UK. A spokesman for Ferrovial said: ‘The sale process is open, and we're studying offers. We'll announce a decision once we've made one.'

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[News Guru]

[textarea]BAA lose fifth PR boss in five years

BAA communications director Malcolm Robertson has resigned, leaving the UK airport operator searching for its fifth PR boss in as many years. He has played down suggestions that BAA’s handling of December’s snow chaos, when Heathrow was paralysed for four days, played a part in his decision, saying: ‘Yes it was a difficult time but I have been at BAA for 12 years and I have been thinking for some time that I need to consider what I do next, [see] what the world outside BAA looks like.’

Mr Robertson, 38, took on the role in 2010, having worked previously as deputy communications director and headed BAA’s communications operation in Scotland. He will leave in September following a handover period with his replacement, who will be the fifth communications director since 2006, and is considering a ‘few options’ elsewhere.

In an email to staff chief executive Colin Matthews said: ‘In the last 12 months [Mr Robertson] has established a sound communications strategy that provides us with a good platform from which to build our reputation. Malcolm leaves with our very best wishes for the future.’

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[News Guru]

[textarea]BAA ordered to sell Stansted and a Scottish airport

BAA, said yesterday that the Competition Commission has provisionally concluded that it should still required to sell Stansted Airport and Edinburgh or Glasgow Airport. The Commission said that the sale of the airports is fully justified and that passengers and airlines would still benefit from greater competition with the airports under separate ownership, despite the current Government's decision to rule out new runways at any of the South East airports.

BAA has mounted a string of legal challenges to try to avoid the sales ever since the Commission initially ruled in 2009 that the operator must sell three of its seven UK airports. Last month, the Supreme Court ruled against BAA in its latest bid to stop the sell-offs. It has already sold Gatwick Airport.

The Commission's Chairman and Chairman of the BAA Remedies Implementation Group, Peter Freeman said, ‘‘We remain convinced that the original decision to require BAA to divest three airports is the right one for passengers and airlines. We found that, if anything, since the report there now appears to be greater capacity available, which will increase the potential for competition at the London airports.'

'However, we will continue to allow the airports to be sold in sequence with a small overlap between the two sales periods with Stansted to be sold first as it serves the larger number of passengers who will benefit.’

BAA said it would ‘carefully consider’ the Commission's provisional decision before deciding how to proceed and restated its belief that there had been a ‘material change in circumstances’ since the initial 2009 ruling. The Commission will publish its final verdict in May or June.

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[News Guru]

[textarea]BAA chief operating officer quits

Nick Cullen, chief operating officer of BAA, left the UK airports operator on Friday. The Sun reports that staff were told it was ‘for family reasons’.

He had only been at the airports giant since the start of 2010, but was criticised by airlines for his handling of the snow chaos that shut Heathrow for days last December, when thousands of passengers were stranded and missed their Christmas holidays. At the time Mr Matthews apologised and gave up his bonus.

A BAA spokesman was unavailable for comment, the newspaper adds.

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[Aviador]

The BBC is reporting that BAA has lost it's latest appeal to stop the monopolies and mergers commission from forcing the sale of two of the company's UK airports.

 

[News Guru]

[textarea]BAA ‘moves to sell Stansted’

BAA has started sounding out bankers about a sale of Stansted Airport for more than £1bn, the Telegraph reports. The newspaper's 'sources' said BAA is preparing to carry out a beauty parade of investment banks at the end of the month, with a view to appointing one to carry out a sale of the airport next year.

The move comes as BAA weighs up whether it should seek a judicial review of the Competition Commissions's decision to force the company to sell Stansted and one of Scotland's two main airports, Edinburgh and Glasgow. In July, the Commission confirmed the decision, arguing ‘that passengers and airlines would benefit from greater competition with the airports under separate ownership’.

Previous reports suggested Stansted may sell for £1.2bn but BAA's regulated asset base is now £1.35bn. Gatwick sold for a discount on its regulated asset base, but its acquisition debt has since been refinanced to release a premium to its buyers.

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[Aviador]

Re: BAA to sell Edinburgh airport

BAA has announced it's decision to sell Edinburgh airport. I think the sale of Edinburgh airport will have come as a big surprise to many people. I think most people expected Glasgow airport to be the one to be offloaded by the company.

 

[flypark]

I agree I was surprised Edinburgh has been chosen, passenger numbers are up 6% even in recession, do you think they will manage to hang on to Stansted?

 

[Aviador]

I agree I was surprised Edinburgh has been chosen, passenger numbers are up 6% even in recession, do you think they will manage to hang on to Stansted?

I think Glasgow will be the dominating airport in Scotland in the years to come. I understand many airlines have been given incentives to operate into Edinburgh. If these incentives stop, airlines will head back to Glasgow in my opinion.