The full cost of BAA's debt was revealed today as the Spanish-owned UK airports operator said its interest payments had soared to £327 million in the first quarter.

The operator of Heathrow, Gatwick and Stansted also revealed that passenger numbers fell by 10 per cent in the three months to March 31. BAA blamed the recession, the worst weather since 1991, the late Easter and the leap year for the slump which saw the number of flyers from Heathrow tumbling by 6.4 per cent while 14.6 per cent less passengers travelled from both Gatwick and Stansted in the first quarter.

However, total retail income per passenger rose by 8.8 per cent to £4.71 and overall revenues for the group rose by 15.5 per cent to £522 million due to higher aeronautical charges at the three London airports.

BAA said the big jump in debt interest payments was due to a £140 million loss on financial instruments, principally index-linked swaps. A further £63 million was added to the payments because of changes in the accounting treatment of Heathrow's Terminal 5.

The increased debt payments contributed to a larger first-quarter, pre-tax loss of £316 million, compared with a £55 million loss in the same period last year. BAA is now paying an average of 6.33 per cent interest on its debt, which was £168 million higher in the first three months of this year at £9.5 billion.

Read the full article in The Times.


Sorry? "BAA blamed...the weather.. the late Easter and the leap year for the slump which saw the number of flyers from Heathrow tumbling by 6.4 per cent"? They forgot to include the attacks by the flying spaghetti monster. That really puts passengers off.

What a bunch of incompetents. We wonder how BAA's investors will feel when they read that kind of rubbish.