BAA to take £24 million weather hit

Airport operator BAA expects to take a hit of around 24 million pounds from last month’s big freeze, which closed many of its runways and dented passenger numbers in the week before Christmas.This figure could rise as German airline Lufthansa and carriers Virgin Atlantic and BMI press BAA to compensate them for five days of disruption at its biggest airport, London’s Heathrow.”The cost of this disruption will almost certainly rise and could well be double by the year-end,” said BGC Partners analyst Howard Wheeldon.”Airlines have a case to push for compensation because BAA was found wanting during the crisis, especially at Heathrow.”Passenger traffic at BAA airports fell 10.9 percent in December year-on-year, after heavy snowfall wreaked havoc especially at Heathrow, where the closure of one of its two runways for several days caused widespread travel disruption.

BAA, majority owned by Spain’s Ferrovial, on Wednesday said 7.2 million passengers flew from its UK airports last month compared with 8 million in December 2009. Heathrow, Europe’s busiest airport, served 4.8 million passengers, down 9.5 percent.Heathrow was part closed for several days in the run up to Christmas as northern Europe’s big freeze hit the travel plans of thousands.”Anyone who says we don’t have the financial incentives to do the right thing for passengers can see the extraordinarily painful cost to us,” BAA’s Chief Executive Colin Matthews told Reuters in an interview.”The hit at Heathrow was about 19 million pounds and about 50 percent of that was lost revenue and much of the rest was additional costs.”Matthews, who received 944,000 pounds in basic salary and bonus last year, has said he will forego his 2010 bonus following a wave of criticism after last month’s disruption.BAA has been widely criticised over its response to the crisis, and Virgin Atlantic said on Monday it would withhold landing and parking fees it pays to BAA until it explains why a day’s snowfall left thousands of air passengers stranded.”We didn’t penny pinch because there’s no incentive not to have enough snow ploughs. The question is how much snow should you plan for? In retrospect, we got that wrong,” said Matthews.”I made 10 million pounds available (after the 2010 snow storms) and we have bought more snow moving equipment and will continue to do so.”The results of an internal BAA inquiry into the disruption headed by non-executive director David Begg are due to be published in March – Reuters