What price expansion?

As the end of the Heathrow consultation gets closer, the eyes of the business community turn towards BAA. Expansion can reap financial rewards for investors, and those fat cats in trading houses across the City are always seeking to make some bucks. But is BAA a good investment opportunity?

Not according to the Times, which has dug up a report by investment bank JP Morgan. Those bankers aren't feeling optimistic about the company, claiming that “Based on existing capex facilities [the loan available to pay for capital expenditure] we expect BAA could run out of cash in Q1-2 2009”.

Ouch! Not what Stephen Nelson and his cronies want you to hear. But it's not the first time that analysts have doubted BAA's finances. Last month the Sunday Times reported that BAA was to make a year-end test of whether it was in breach of the covenants on some its loans, and last year we reported that financiers had downgraded BAA's economic status to 'junk'. Looks like that third runway might be a longer shot than we'd thought...