BAA, the airport operator that owns Heathrow and Stansted, fell deeper into the red today after it was forced to take a £665 million charge on the sale of Gatwick and the cost of servicing its pension deficit.

The company, which is owned by Ferrovial, of Spain, reported a pre-tax loss of £822 million for the 12 months to December 31, compared with a £324.2 million loss in the year before.

Stripping out one-off items, which include a £277.3 million loss of the £1.5 billion sale of Gatwick last year, losses narrowed from £190 million in 2008 to £156 million.

Full-year revenues grew by 8 per cent to £1.9 billion.

Colin Matthews, the chief executive of BAA, said: “Our financial performance remains resilient, especially at Heathrow, which benefits from its position as the UK´s only hub airport, higher retail spending by passengers and strong cost control.”

But he warned: “We expect 2010 to present further economic challenges for the industry as a whole, and we will remain focused on improving our efficiency and the service we offer customers.”

Mr Matthews said that he expected a “modest” recovery in passenger traffic this year, which would support similar growth in turnover and underlying earnings.

BAA is awaiting the outcome of a legal battle with the Competition Commission over whether it must sell Stansted.

The commission's initial ruling that BAA should sell both Gatwick and Stansted was overturned by the Competition Appeal Tribunal on the basis of apparent bias.

This was because a member of the commission´s inquiry panel that issued the ruling had been on the team investigating BAA.

Two weeks ago the commission said that it was seeking leave to appeal to the Court of Appeal against the tribunal´s judgment.

The date for the appeal has not been set.

Of the exceptional costs, £218 million was a provision to allow for the costs of covering the emergence of a deficit in the BAA pension scheme during 2009.

BAA said that a further £117 million charge came from “fair value losses on financial instruments” — the extra cost of servicing index linked bonds it has issued.

The group's debts fell by 9 per cent in the year to £8.58 billion.

via BAA losses reach £822 million on Gatwick sale – Times Online.