‘Encouraging’ Q3 result from British Airways
An improved third quarter saw British Airways pre-tax profits rise to £164 million against £151 million in the same period in 2004.
The three months ending December 32 saw the airline’s turnover rise by 8.8% to £2,129 million, driven by strong traffic particularly in premium cabins.
The pre-tax profit for the first nine months of the carrier’s financial year came in at £529 million, £10 million up year-on-year.
But selling costs in the quarter rose by 7.8%, attributed to additional promotional spend on new Indian services and the timing of new marketing campaigns.
Fuel costs rose by 28.2% due to higher prices, a stronger US dollar and a larger flying programme.
Chief executive Willie Walsh said total costs in the three months were up by 7.3% “but we have initiatives underway to reverse the trend, such as management reductions, changes to working practices, reduced absenteeism and restructuring unprofitable parts of the business”.
BA is to unveil a £100 million new-look Club World long haul business class service in the summer, a relaunch of regional routes next month and six new European routes from Gatwick.
BA chairman Martin Broughton said: “Some yield improvement is still expected for this financial year. Consequently, revenue is now expected to grow by more than 8%. Despite the improved revenue outlook, market conditons remain broadly unchanged as significant promotional activity is required to maintain seat factors.”
Underlying costs are expected to be 1% higher than previous guidance given at the start of the year, he added. Fuel costs continue to be “a challenge for the industry” and are expected to be up by £525 million this year.
Report by Phil Davies
Phil Davies
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