BAA loss narrows as British Airways-AMR alliance drives traffic

BAA Ltd, the owner of London's Heathrow and Stansted airports, narrowed its first-half loss as an alliance between British Airways and American Airlines and growth in emerging markets spurred a recovery in traffic.

The net loss at the two London airports was £130.4 million ($214 million), compared with deficit of £260.2m a year earlier, BAA said today in an e-mailed statement. Sales advanced 12 per cent to £1.07 billion. Passenger numbers at the airports rose 7.1 per cent to 41.4 million, rebounding from last year as disruption caused by volcanic ash from Iceland eased. Increasing travel demand from emerging markets including Brazil, India and China has also boosted traffic at Heathrow, Europe's busiest airline hub. "Most recently, the relative performance in North Atlantic traffic improved significantly in the second quarter, driven by the success of American Airlines and British Airways joint transatlantic services," BAA said in the statement. BAA, owned by Spanish builder Ferrovial SA, was last week ordered to sell Stansted, a base for discount carriers including Ryanair Holdings Plc, and airports in Edinburgh or Glasgow after the latest UK Competition Commission ruling in a four-year tussle. The regulator, reviewing an earlier decision, said a breakup is "fully justified" and must start within three months. The company, which sold London Gatwick, the second-busiest UK airport, to Global Infrastructure Partners in December 2009, may yet seek a judicial review of the latest decision.