Spanish owned airport operator BAA said it expected profit to grow strongly in 2011 as an economic recovery pushes up demand for travel, helping it shrug off a year of major disruption.
The operator of London's Heathrow, Europe's busiest airport, managed to post narrower losses for 2010 despite taking a £58 million hit from last year's freeze, which closed runways in the week before Christmas. That came on top of disruption caused by strikes and volcanic ash.
BAA, majority owned by Spanish infrastructure group Ferrovial, reported a pretax loss of £316.6 million for 2010 yesterday, 61.5 per cent lower than 2009's loss of £821.9 million.
"These results represent pretty solid progress given the numerous setbacks we had last year," BAA's chief executive Colin Matthews said.
"We would expect business travel to keep growing - especially to China and India given the growth there. In 2011, we expect to deliver a strong increase in profits and cash flow."
BAA was widely criticised over its response to the big freeze, which left Heathrow part closed for several days in the run up to Christmas, hitting the travel plans of thousands.
Virgin Atlantic withheld landing and parking fees its pays to BAA in protest, while other airlines, including Britain's BMI, said they would consider taking legal action to recoup losses incurred because of the disruption.
Ferrovial shares in Madrid, which have risen a quarter in the last year as debt is reduced, were 0.5 per cent down at €8.51 by 9.42am.
Ferrovial is looking to sell a 10 per cent stake in BAA to help trim 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.
BAA was last week told it would have to break up its network of airports after a court rejected its bid to challenge a sale order by Britain's Competition Commission.
BAA owns London's Heathrow and Stansted airports, Southampton in south England, as well as Scotland's Edinburgh, Glasgow and Aberdeen airports.
The watchdog ordered BAA to sell Stansted and either Glasgow or Edinburgh airports in Scotland within two years. BAA cannot appeal the decision again in the UK but could take the case to the European courts.
"We need to think carefully about our next step but we haven't made our mind up yet," said Mr Matthews, who added that since Britain's coalition government decided to scrap plans to build a third runway at Heathrow the competitive landscape had changed.
Reuters