British Airways shares fall
The fall came after the chairman’s comments that full year revenues would be hit this year.
“The travel market continues to be subject to considerable global economic and political uncertainty, and is expected to remain soft for the remainder of the year,” said Chairman Lord Marshall.
The airline tripled operating profits from stg£50 million last year to stg£158 million this year as a result of the cost reductions in fuel, manpower and selling and pre-tax profit rose from stg£40 million to stg£65 million.
Since the financial crisis precipitated by September 11 forced a rethink for the airline, it has moved to cut capacity and introduce some lower fares in a bid to compete with the no-frills carriers which are thriving while the old-model airlines are struggling with the drop in the higher-margin business-class passengers.
Passenger capacity, measured in available seat kilometres (ASKs), reduced by 14.5% for the quarter while revenue passenger kilometres (RPKs) were down by 13.8% for that period.
Rod Eddington, British Airways' Chief Executive, said:
“We are only six months into a two year structural change programme. Despite very tough market conditions we are delivering on cost efficiencies. We have always said our recovery will be cost driven and not dependant on an upturn in market conditions. That remains true.”
The company also reduced its net debt by stg£428 million to £5,866 million since the start of the financial year.
