Airports operator BAA PLC said Tuesday it is cutting 700 jobs at Heathrow, Gatwick and Stansted airports as part of its plans to save 45 million pounds ($79.7 million) a year.
BAA, which operates seven airports across Britain, said it plans to reduce the number of back office and management staff at the three London airports, but added there would be no cuts in front-line security staff.
The company announced the job cuts as it revealed a drop in net profit for the first half of the year, despite a slight rise in passenger numbers.
Net profit for the six months to Sept. 30 fell to 257 million pounds, ($455.1 million) from 418 million pounds a year ago. Revenue increased to 1.17 billion pounds ($2.1 billion) from 1.13 billion pounds.
BAA said that passenger traffic increased 2.5 percent to 82.3 million passengers over the six months, with the long-haul market a significant contributor to growth.
The airports operator reiterated its forecast of 3 percent growth in passenger numbers through its airports this financial year. The company downgraded its previous forecast of 3.5 percent growth in September because of the July terrorist attacks in London and flight cancellations at Heathrow Airport by British Airways PLC due to industrial action.
BAA said retail sales at the seven airports rose 3.8 percent to 324 million pounds ($573.6 million) over the half.
The company, which employs nearly 12,000 people in Britain and another 500 overseas, said that the job cuts were vital to counter a string of threats to its business, including passengers spending less time in its shops. The company is building a new terminal at Heathrow to relieve congestion at the airport.
Its cost-cutting program is expected to deliver annual savings of 45 million pounds ($79.7 million) from 2008-09 but will cost around 90 million pounds ($159.3 million) to implement.
BAA shares fell 0.2 percent to 6.13 pounds ($10.87) on the London Stock Exchange.
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Looking forward, BAA is forecasting a 3.5 percent rise in passenger numbers.
BAA said it expects passenger numbers at its seven airports in Britain to increase by 2 percent in the year ending March 31.
BAA said in a statement that the offer, which it received March 30, failed to "reflect the true value of the company."
Spain's Grupo Ferrovial SA said Wednesday it would consider a small increase to its 8.75 billion pound ($15.6 billion) takeover offer for BAA PLC, after the British airports operator urged...