UK. BAA (SP) Limited, which owns London Heathrow and Stansted airports, has reported a continued strong performance from retail activities in Q1 2011.
Gross retail income climbed by +7.4% year-on-year in the quarter to £110.7 million, net retail income hit £102.9 million (+7.6%) while the key figure of Net Retail Income (NRI) per passenger rose by +7% to £5.51.
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At Heathrow, gross retail income increased +9.8% to £94.4 million (2010: £86.0 million) and NRI per passenger increased +7.3% to £5.91 (2010: £5.51). The performance was led by duty and tax-free, airside specialist shops, catering and car parking.
Retail growth was supported by a new walk through area in the World Duty Free store in Terminal 3 and extension of the store in Terminal 5. In airside specialist shops, the recent exceptionally strong trading in the luxury segment continued, noted BAA.
Strength in car parking reflected increased usage, tariff increases, and strength in premium business usage.
Stansted’s gross retail income declined -4.7% to £16.3 million (2010: £17.1 million), which BAA described as “a resilient performance” given passenger trends which meant that NRI per passenger increased +2.0% to £3.87 (2010: £3.80). Growth in Stansted’s NRI per passenger reflects particularly performance in airside specialist shops and car parking, the company added.
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Duty and tax free turnover was £25.6 million (23 million in Q1 2010) in Q1 2011, while airside specialist shops produced turnover of £19.4 million (£16.8 million last year).
Total group turnover rose by +5.6% to £481.5 million with adjusted EBITDA up by +15.4% to £200.9 million.
In the three months ended 31 March 2011, combined passenger traffic at Heathrow and Stansted increased +0.6% to 18.7 million (2010: 18.6 million). Year on year performance reflects continued growth at Heathrow partially offset by Stansted’s performance.
Traffic in the first quarter of 2011 was affected by events such as unrest in the Middle East and North Africa and the earthquake and tsunami in Japan. “It is also possible that the recent significant increase in the oil price has started to affect levels of passenger traffic,” BAA said.
At Heathrow, traffic increased +2.5% to 15.0 million (2010: 14.6 million) with European scheduled traffic maintaining its recent position of being the most significant driver of overall performance, growing +5.4% to 5.5 million passengers (2010: 5.2 million).
Stansted’s reported traffic declined -6.6% to 3.7 million (2010: 3.9 million). The decline partly reflects the timing of Easter this year while airlines are also deploying capacity from the UK to other European markets, BAA said.
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Colin Matthews, Chief Executive Officer of BAA, said: “Our strong performance reflects growth in traffic, an improving international economic outlook and the efforts of everyone working at our airports to improve passengers’ journeys. During the first quarter, Heathrow achieved strong service standards including some of the best statistics for departure punctuality in recent years and passengers continue to compare Heathrow favourably with other European hub airports.
“But we must do better, and that is why I have established a Heathrow partnership to ensure BAA, airlines and their partners work more closely together for the benefit of our passengers. Our £5 billion investment programme at Heathrow continues to improve passenger journeys and airline operations through more modern facilities. In the coming weeks, the opening of Terminal 5C will ensure more passengers have a smoother journey through Terminal 5 while we continue to make good progress in constructing the brand new Terminal 2.
“As the UK’s only hub airport, Heathrow has a vital role to play in supporting the economic recovery. By keeping our focus on continuous improvement, I believe we can play our part in supporting business links with emerging markets and in ensuring that London continues to stand up to the threats from other hub airports in Amsterdam, Frankfurt, Madrid and Paris.”
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