Retailers demand rents cuts from BAA after airport chaos report

Retailers demand rents cuts from BAA after airport chaos report: Retailers demand rents cuts from BAA after airport chaos - report

LONDON (AFX) - Retailers operating in Britain's airports are demanding that BAA, the UK's airports operator recently acquired by Spanish construction firm Grupo Ferrovial SA, reduce their rent in response to the downturn in trade following last month's terrorist threat, according to the Financial Times.

At least three prominent retail chains with stores in BAA's seven airports across the UK revealed to the newspaper that they were planning to renegotiate rental terms, having warned the airport operator they were no longer willing to pay steep concession rates.

Retailers typically pay BAA a 10-20 pct cut of all airport sales, with a minimum guaranteed level of income. However, several chains told the FT they were aiming to reduce that cut in the coming weeks.

The security turmoil -- sparked by tough security measures in response to an alleged plot to blow up passenger jets -- has lost the airport operator 13 mln stg in revenues and added costs, the article said.

One airport source said it was still early days and pointed out that sales were beginning to recover to normal levels as the flow of traffic through the airports improved, according to the report.

Heathrow said 200-250 travellers were moving through security every hour, against 250-280 in the days before Aug 10.

About a quarter of BAA's 2.2 bln stg of revenues in the year to March came from shopping.

The retailers' demands come as BAA faces criticism from airlines, angry at the airport operator's handling of the situation in the days after the alleged plot was uncovered. British Airways PLC said the upheaval had cost it about 40 mln stg.