Flying High, Long Haul

Via New York Times Dealbook, British Airports Authority (BAA) chief executive Mike Clasper advises shareholders not to accept an  £8.75 billion bid from Spanish operator Grupo Ferrovial:

"My message to shareholders is: Don't sell your shares. It's not the right time. It's not the right price," BAA Chief Executive Mike Clasper said in a statement.

BAA said it planned to spend 9.5 billion pounds on its London airports over the next 10 years and expected passenger traffic to increase 3 percent a year at these airports over the next decade.

BAA has hardly inspired confidence or trustworthiness in anyone over the past decade, but Clasper is probably right here. One of the ironies with the airline industry is that, despite all its woes, it shows no long-term shortage of growth in customer demand. BAA's figures are also compatible with independent research carried out which shows a growth last year in frequency and capacity of three and five percent respectively - which amounts to more than 920,000 fights and 146 million passanger seats.

This kind of growth is impressive in light of the troubles the industry has experienced with high fuel prices and terrorism scares: taking into account that confidence is picking up again in global security and oil prices are now starting to look inflated, as well as the fact that airports are not really affected by airline price wars if there's still a high demand and necessity for flights, and this could start to look like a very healthy business again fairly soon.