Windfall for staff as BA profits soar

British Airways today announced annual pre-tax profits of £620m (€914), up from £513m (€756m) a year earlier.

British Airways staff are to share a £48m (€70.7m) bonus after the airline posted a better-than-expected 21% rise in annual profits today.

The improvement to £620m (€913m) was achieved despite a 44.7% increase in fuel costs to £1.6bn (€2.3bn), while BA said employee costs rose by 5%.

The airline said its short-haul business was in profit for the first time in 10 years, but added that its pensions deficit had continued to rise, up by £101m (€149m) to £2.1bn (€3bn).

BA said low interest rates caused the deficit to rise, even though the airline increased its contributions and benefited from a stronger stock market.

The company is currently in discussions with staff, pension fund trustees and trade unions about how to tackle the shortfall.

Today’s profits improvement was driven by a 10% rise in revenues to £8.5bn (€12.5bn), while the company has boosted efficiency through job cuts and initiatives such as self-service check-ins.

The changes meant operating margins rose to 8.3% as BA attempts to meet its target of 10% by 2008.

The measure is used to determine staff bonuses and BA said today that around 40,000 non-management employees would get a windfall equivalent to 1.15 weeks’ pay. The minimum bonus will be around £575 (€847), it added.