Summary of the headline figures: Passenger load factor in May 2002 increased by 2.0 points versus last year, rising to 66.9 per cent. This was driven by a 10.2 per cent reduction in traffic, measured in Revenue Passenger Kilometres, on a reduction in capacity, measured in Available Seat Kilometres, of 12.9 per cent. The reduction in traffic comprised a 9.1 per cent decline in premium traffic and a 10.4 per cent fall in non-premium traffic. Cargo, measured in Cargo Tonne Kilometres, fell by 3.7 per cent.
Market conditions: Market conditions remain unchanged. Traffic volumes in shorthaul, particularly in the UK, and Asia Pacific offer some encouragement. Market share gains in the Americas region are helping to keep seat factors broadly unchanged, on a capacity reduction of just 7%. Premium traffic remains stable.
Strategic developments: British Airways signed a binding ‘heads of agreement’ deal with easyJet for the sale of Deutsche BA (DBA). Under the terms of the deal British Airways is granting easyJet the option to buy 100 per cent of Deutsche BA, by March 31, 2003. The deal is potentially worth between £18.3 million (30 million Euros) and £28 million (46 million Euros), dependent on when easyJet exercises the option.
British Airways announced it is to change the pension provision it makes for future new UK employees, moving from a defined benefit final salary basis to a defined contribution basis from autumn 2002. The decision will not affect the pension benefits of the 65,000 members of NAPS, the New Airways Pension Scheme, or the 36,000 members of APS, the original Airways Pension Scheme, which was available to employees who joined before 1984.