Can BAA afford to expand?

Could it be that despite the Government's determination to expand Heathrow - regardless of the cost to communities and the climate - that beleagured BAA can't actually afford to build an new tea-shop, let alone a third runway?

International finance analysts Bloomberg noted in response to the 'consultation' that BAA's credit rating was recently down-graded to 'junk' status - i.e. you wouldn't want to lend them a fifty pence for a cup of coffee. Put simply, BAA is broke.

But BAA isn't broke as you or I would describe it, they're skint as only large corporations can be. BAA is £9 billion in debt - a truly staggering amount. To put it into perspective, it's the equivalent of the exchange rate GDP of Kenya - rather fitting, as that's the country whose CO2 emissions will be equalled by those of the third runway.

So how bad is it looking for everyone's favourite airport owner? Howard Wheeldon, an aviation analyst at BGC Partners in London, told Bloomberg, "Somehow, BAA will need to finance the project -- not easy when its credit rating is already down to junk status as it struggles to refinance 9 billion pounds of Terminal 5 and other airport development debt".

So would he invest in the third runway? Not likely, as "Chances of it ever seeing the light of day must be remote".