Companies: BAA    EZJ   

There was plenty to keep followers of the airports/airlines sector interested this month, with FTSE 100 airports operator BAA furnishing shareholders with details of its defence against the £8.75 billion bid from Spanish raider Ferrovial. The blue chip operator of Heathrow and Gatwick said it was ideally placed to take advantage of growth in air travel and had a ‘first-rate’ management team.

These comments came as Ferrovial indicated it might raise its offer for BAA, if it is able to examine the books. A consortium fronted by Ferrovial first approached BAA back in March with a possible takeover pitched at 810p. When it was rejected, Ferrovial launched a hostile bid a month later at the same price. BAA also spurned an 870p offer from a Goldman Sachs-led consortium in April.

Elsewhere, budget carrier Easyjet flew in with a near doubling of half-year losses on the back of soaring fuel costs, yet the shares gained altitude because the loss was better than expected and higher annual profits are on the cards. Interims to the end of March revealed pre-tax losses taking off from £21.6 million to £40.3 million, with the ‘p&l’ struck by a near 50 per cent up tick in fuel costs as well as the late timing of the Easter weekend.

Nevertheless chief executive Andy Harrison explained the deficit was not as bad as it could have been and predicted full year profits would be between ten and 15 per cent higher than the £68 million reported for 2005, sending shares in the FTSE 250 counter 16.5p higher to 329.5p.

As well as offsetting fuel costs with cost cutting elsewhere, the company has been able to increase non-ticket sales (such as in-flight food). It makes most of its money during the peak holiday season of the summer.