British Airways lands back in black for first time since 2008
But airline will still post full-year loss despite fourth-quarter profit of £25m
Published 06/02/2010 | 05:00
Embattled British Airways made a profit of £25m (€28m) in the quarter to the end of December as its financial performance was cushioned by the impact of cost reductions.
The quarterly profit was the first time since mid-2008 that the carrier has managed to be in the black, and was significantly ahead of the more than £130m (€147m) loss that analysts expected the carrier to deliver.
Shares in the airline closed down 2.3pc in London at £2.06 (€2.36) yesterday, however.
Chief executive Willie Walsh told investors that while BA was "on the right track", the airline would still post a loss for the full financial year ended in March.
"Permanent structural change is being introduced in all areas and will return us to sustained profitability," claimed Mr Walsh.
BA's total operating costs declined 10.5pc in the nine months to the end of December as the airline laid off staff and cut pay, while fuel costs were 22pc lower. Unit costs were 6.7pc lower in the period.
But the airline still posted a nine-month operating loss of £86m (€96m) to the end of December compared to an operating profit of £89m in the equivalent period in the previous financial year.
BA's total revenue in the quarter to the end of December was 12.9pc lower year-on-year. Passenger revenue was down 13pc as capacity dropped 3.9pc, while yields -- the average fare paid per passenger -- were 11.1pc lower. Premium traffic volumes at BA have declined 9.7pc in the first nine months of its fiscal year -- a figure BA said was better than the industry average.
It added that the load factor on its all-business class flights between London City Airport and New York's JFK, which stop at Shannon to refuel and allow passengers to clear US customs and immigration, is 75pc.
The company said there had been a marked improvement in cargo volumes and yields in the last quarter.
BA added that in January, premium passenger traffic fell 2.1pc and non-premium traffic dropped 7.9pc, with snow disruption affecting the figures.
British Airways has been battling with the Unite union representing more than 10,000 cabin crew that work for the airline as it tries to cut jobs. A Christmas strike was narrowly averted after a UK court declared a union ballot invalid.
The two sides have been in court again in recent days, with Unite asking for the airline's decision to reduce the number of cabin crew on long-haul flights to be overturned.
A fresh strike ballot is also being held. However, talks between the sides to prevent the industrial action are believed to be progressing.
Mr Walsh also said that plans to merge with Spain's Iberia were on track to be completed by the end of 2010. BA is also seeking regulatory clearance to tie up with American Airlines.