06 October 2008

Financial markets turmoil hitting BA

Long haul business travel is suffering due to Ã¢â¬Ëœincreased anxietyÃ¢â¬â¢ in financial markets, according to British Airways.

The airline, describing trading conditions as continuing to be Ã¢â¬ÅâœchallengingÃ¢â¬~, said long haul premium traffic had softened after the summer.

Ã¢â¬ÅâœForward bookings are being affected by the increased anxiety in financial markets and by the uncertain economic outlook,Ã¢â¬~ the airline said.

Ã¢â¬ÅâœRevenue forecasts for the year carry some risk, although current good yields and the stronger dollar are broadly offsetting the volume impact. Cost initiatives continue in an effort to offset revenue risk.Ã¢â¬~

BAÃ¢â¬â¢s fuel costs are still expected to be around Ã&#pound;3 billion for the year.

Ã¢â¬ÅâœThe target continues to be for the business to break even at the operating level,Ã¢â¬~ the airline said while reporting September traffic figures.

These showed traffic down by 4.8%, with the passenger lad factor dropping by 4.3 points to 74% over the same time last year.

Premium carryings suffered the worst, down by 8.6% while the airline saw a 4.1% fall in economy.

by Phil DaviesÃ~

Ã~