BA’s premium class slammed by downturn

7th Jan 2009

Cash-strapped passengers continue to leave British Airways’ premium class, with numbers sliding 12.1 percent last month. Economy class remained relatively more stable, down just 1.7 percent.

The total number of passengers carried in December fell 119,000 to 2.5 million, with the biggest fall in Asia Pacific. BA’s load factor was down 0.2 percent to 76.7 per cent. The airline also suffered a slump of 14.3 per cent in its cargo division as export volumes around the world fell.Business and first-class passengers are crucial to BA as they contribute most to the airline’s profits.
Despite the figures, chief executive, Willie Walsh, remained bullish about the year ahead, saying that the coming months would be challenging, but that the airline emerge from the downturn stronger and ready to expand.
Mr Walsh said in a press conference yesterday: “There is no shortage of airlines that are available for acquisition. I could go out this afternoon and buy half a dozen. I get calls all the time from chief executives saying ‘please come and buy us’. We are determined to use this opportunity to transform and strengthen BA and position it to take advantage when there is an upturn in the economy.”
Walsh said he was confident the proposed alliance with American Airlines will be approved, possibly in time for the next winter timetable.

He said: “The environment is very different today to last time and there has been no great opposition from the industry in the US.”
Internally, the airline has told staff to expect a restructure that will be “far- reaching, reshaping our company from top to bottom”.
Writing in the staff newspaper, Chief Financial Officer Keith Williams said: “Only through delivering fundamental change can we achieve the small profit we are targeting this year and emerge from the crisis as a strong global player.”

BA has already lost 480 managers after offering voluntary redundancies to 1,400 people. But a BA spokesperson said the airline was looking at further ways to reduce costs and duplication to raise efficiency.



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