Spending take-off in BAA shops

NOT only are more people taking to the air, they are also spending more money at airports while waiting to board their aircraft.

BAA, the London airports monopoly that operates Heathrow, Gatwick and Stansted, had its busiest-ever Christmas quarter, handling 32m passengers in the last three months of 2003, 5.6% more than a year earlier.

That means more money for BAA from its levies on airlines, but on top of that passengers are spending more during their stay in the airport shopping malls.

BAA said its retailing income rose 9.5% in the quarter with the average spend per passenger per visit up by 3% to £4.36.

Pre-tax profits were £129m, a rise of 5.7%, and £441m for the first nine months of its financial year, a fall of 1.6% but towards the top of City analysts' expectations.

BAA's profits earlier in the year were hit by hangover of the Iraq war, the Sars outbreak and the continued no-show of American visitors in the UK.

Much of BAA's passengers growth was driven by Stansted and its four regional airports as figures showed that Heathrow and Gatwick remained below their record highs hit in 2000.

Heathrow has suffered especially from a lack of North American visitors while Gatwick has been hit by cost-cutting flag carrier British Airways' decision to pull out many services and retrench at Heathrow.

BAA shares today opened at 514 3/4p, near to a 15-month high.