Investment fears over BAA losses

Airport giant BAA has recorded massive pre-tax losses of £748.7m to add to parent company Ferrovial's debt mountain of £9.7bn.

The huge losses will alarm contractors who are banking on the airport operator sticking to its infrastructure investment plans.

One contractor said: "BAA is a major client of a lot of people and it's always a worry when you see numbers like this.

"Plans to update Heathrow have already been delayed and announcements like this will only create more uncertainty among contractors."

The losses are worse than last year's £519m figure and were exacerbated by a £225m loss incurred selling Gatwick to Global Infrastructure partners for £1.51bn via a forced sale ordered by the Competition Commission.

Colin Matthews, Chief Executive Officer of BAA, said: "We have delivered a good performance in line with expectations for the first nine months of the year, helped by Heathrow's continued resilience, higher retail spending by passengers and tight cost control. Our London airports are strongly cash generative and our debt and underlying interest costs are stable.

"We are pleased to have agreed the sale of Gatwick Airport and our focus for the rest of the year is on improving efficiency and service standards for our customers, and further reducing costs. The accounting losses we are reporting today reflect non-cash exceptional charges and do not reflect the strong underlying performance of the business."