BAA is expected to announce a financial hit of up to £25m from the recent Heathrow snow chaos this week, as the airport group becomes the latest aviation company to reveal the cost of the December freeze.
Britain’s largest airport operator, which is owned by Spain’s Ferrovial, is likely to put the impact at between £20m and £25m on Wednesday, when it will also reveal Christmas traffic statistics for its six airports, which include Stansted, Edinburgh and Glasgow. While BAA’s Scottish operations were badly hit, Heathrow will account for most of the losses after suffering five days of disruption in the wake of heavy snowfall on the weekend before Christmas, according to The Guardian.
The plans of up to a million passengers were affected, and the knock-on effect on landing fees and retail income left the group with a multimillion-pound loss. British Airways, Heathrow’s largest airline, put the cost of the snowfall at £50m last week and is considering joining other carriers in legal action against BAA. Air France-KLM, which suffered significant disruption at Paris’s Charles de Gaulle airport, lost up to €35m as much of Europe was hit by snow.
An hour-long shower covered Heathrow in five inches of snow, which froze aircraft to their stands when temperatures dropped sharply soon afterwards. Lacking the resources to de-ice the entire airfield rapidly, BAA was unable to operate Heathrow at full capacity for five days.
BAA’s chief executive, Colin Matthews, has waived his 2010 bonus in the wake of the episode. The group’s chairman, Sir Nigel Rudd, is understood to be backing him despite the damaging shutdown.
A source close to the BAA board said the group’s reputation and performance had improved significantly since Matthews joined in March 2008, with 70% of passengers at Heathrow now rating their experience as “excellent” compared with 50% when he started. Operational glitches have also been tackled: the airport now loses fewer bags, while nearly all passengers now spend no more than five minutes in security queues.
However, BAA in effect acknowledged that it was under-prepared for the snowfall when Matthews immediately sanctioned a £10m investment in snow-clearing equipment. Although BAA’s Heathrow and Stansted operations announced an operating profit of £255.7m in 2009, interest payments on a £9.7bn debt burden and one-off charges turned that into a pre-tax loss of £821.9m.
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