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Eurozone Crisis Hitting Air Transport: BAA

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Economic turmoil in the eurozone is hitting air transport, with fewer people travelling and less cargo moved between Britain and crisis-hit nations like Greece and Spain, British airports operator BAA said on Tuesday.

The owner of London Heathrow, Europe’s busiest airport, said passenger numbers between Heathrow and Greece dropped 11.3 per cent in May compared with the same month a year ago, with numbers to and from Italy falling 9.2 per cent, Portugal down 11.4 per cent and Spain down 2.5 per cent.

“The impact of the eurozone crisis is still being felt with sharp falls in passenger numbers to the worst affected countries and reduced cargo traffic,” said BAA chief executive Colin Matthews.

Last week’s bailout of Spain’s banks, beset by bad debts since a property bubble burst, made it the fourth country to seek assistance since Europe’s debt crisis began, following the rescues of Greece, Ireland and Portugal.

BAA, owned by Spanish infrastructure group Ferrovial, said cargo traffic – a key indicator of economic health – fell 2.4 per cent across its airports last month. Cargo traffic at Heathrow was down 3.8 per cent.

“Both (cargo) figures are likely to be a reflection of the continued economic problems, particularly in the eurozone,” added Matthews.

IAG, formed by the merger of British Airways and Iberia, last week said worsening economic conditions in Spain hit its performance last month, undermining strength in long-haul travel out of London.

This follows the recent admission by British tour operator Thomas Cook that summer bookings to Greece were down on a year ago, especially from Germany.

Traffic at airports operated by BAA fell 0.1 per cent in May, compared with the same month in 2011, reflecting last year’s late Easter and royal wedding which boosted traffic in May 2011. The shift of a public holiday from late May to early June this year also reduced last month’s traffic figures, it said.

BAA said 5.8 million passengers passed through Heathrow last month, 0.6 per cent down on May 2011. It also owns Stansted and Southampton in the south of England, and Glasgow and Aberdeen airports in Scotland.

Stansted, dominated by low-cost carriers easyJet and Ryanair, posted a 5.5 per cent fall in traffic. Passenger numbers at Glasgow and Aberdeen airports rose 6.2 and 13 per cent, respectively, after the impact of a last year’s volcanic ash cloud was taken into account.

BAA, prevented by the government from building a third runway at Heathrow because of environmental concerns, has seen traffic to emerging markets rise in recent years and believes it is now falling behind rival European airports in the battle for these lucrative routes because of constraints on growth.

The company said the eurozone crisis showed why Britain urgently needed to build better links to the countries whose economies are growing such as China, India and Brazil.

“With the UK’s only hub airport, Heathrow, already full, France and Germany are forging ahead and we are being left behind,” said Matthews.

Britain will launch a consultation document on sustainable aviation next month with BAA expected to lobby again for a third runway. The government could use the aviation study to rule it out once and for all or may rethink its opposition to the plan.

Shares in Ferrovial, which have fallen 12 per cent in the last three months, were flat at EUR8.08 by 0635 EDT, valuing the company at around EUR5.9 billion (US$7.4 billion).

(Source: Reuters)