UPDATE 2-Heathrow business travel growth cuts BAA losses

* Heathrow Q3 passenger traffic up 4 pct on year

* Business travel to high growth destinations a driver

* BAA 9-mth pretax loss 192.6 mln stg vs 784.7 mln

* BAA 9-mth revenues 1.54 bln stg vs 1.48 bln

* Plans 250-325 mln stg bond issue

(Adds BAA comment, shares more details)

By Rhys Jones

LONDON, Oct 27 (BestGrowthStock) – UK airport operator BAA said
rising business traveller traffic helped shrink losses in the
first nine months of 2010 and unveiled plans for a bond issue to
refinance part of its 2 billion pounds ($3.2 billion) debt.

BAA, owned by Spanish infrastructure group Ferrovial
(FER.MC: ), said its pretax loss for the nine months to the end of
September narrowed by 75 percent to 192.6 million pounds as
revenue rose 4.4 percent to 1.54 billion pounds.

The owner of London’s Heathrow said passenger traffic at the
capital’s busiest airport jumped 4.4 percent to 19.5 million
from July to September compared with a year ago and that it was
bullish on its prospects for the remainder of the year.

“Although the UK economy is in a tough state, many parts of
the globe are growing very fast so business travel to those
places is buoyant, ” BAA’s Chief Executive Colin Matthews told
reporters on a conference call.

“Heathrow is exposed to global business activity and that’s
one reason why it’s been so strong but with UK spending cuts
there will be less money in people’s pockets so no one is
predicting an easy time in 2011.”

BAA was last year hit by an impairment charge of 225 million
pounds on the sale of Gatwick airport and an exceptional pension
cost of 262 million pounds.

Global airlines have hiked their profit forecasts this year
as recession fades and traffic rises.

Industry body IATA said it expected the industry to post a
combined net profit of $8.9 billion, more than three times the
previous forecast of $2.5 billion made in June. [ID:nLDE68K1FA]

BAA, which also owns London’s Stansted airport, said it
hoped to raise between 250 and 325 million pounds through a bond
issue to refinance the remainder of a 465.8 million pounds loan
facility, which is due in 2011.

Shares in Ferrovial, which have jumped a fifth in the last
three months, were 0.2 percent up at 8.05 euros by 0820 GMT,
valuing the group at around 6 billion euros.

Ferrovial last week said it plans to sell a 10 percent stake
in BAA to halve its debt pile. [ID:nLDE69L0BU]

Earlier this month BAA was told it would have to break up
its network of British airports after the UK Court of Appeal
overruled a previous decision in its favour.

BAA will have to dispose of Stansted airport, northeast of
London, and either Edinburgh or Glasgow airports in Scotland
within two years, after the court said an original ruling by the
Competition Commission had not been influenced by bias.
(Editing by Golnar Motevalli and Andrew Callus)
($1=.6298 Pound)

UPDATE 2-Heathrow business travel growth cuts BAA losses