Full Year Profit Of £150 Million

* Full year pre-tax profit of £150m, up from £5m a year ago

* Operating profit more than quadrupled, despite fuel costs almost £300m higher

* Yields up a record 11.5 per cent in the quarter and 7.7 per cent for the year

* Overall passenger capacity down 7.1 per cent in the quarter and 3.3 per cent in the year

* Earnings per share of 10.6p, compared with a loss of 2p last year

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* Total dividend payment for the full year maintained at 17.9 pence per share.


London, Tuesday May 22, 2001: British Airways today posted a pre-tax profit of £150 million for the 12 months ended March 31, 2001 (2000: £5 million). Operating profit more than quadrupled to £380 million (£84 million).


Group turnover for the full year was up 3.8 per cent at £9,278m (£8,940m). In the mainline passenger business, traffic volumes, measured in revenue passenger kilometres (RPKs), fell by 0.7 per cent. Mainline capacity, measured in available seat kilometres (ASKs), fell by 3.3 per cent in line with the group’s strategy.


Passenger yields per RPK improved by 7.7 per cent, the biggest year-on-year improvement since privatisation in 1987.


Excluding the adverse impact of a 37 per cent increase in fuel prices, unit costs would have fallen by 0.3 per cent. This reflects increased cost efficiencies including lower cost of sales, e-procurement initiatives and an improvement in productivity which was up 1.8 per cent.


In the quarter, yields per RPK improved by 11.5 per cent, despite the impact of a slow down of the US economy, foot and mouth disease and the airline’s computer problems in the second and third week of March. This represents a record year-on-year yield improvement.


On the strength of this performance, the Board recommends the final dividend is maintained at 12.8 pence. This would make a total dividend payment for the full year of 17.9 pence per share.


Rod Eddington, Chief Executive said: “This is an encouraging set of figures showing that our business strategy is delivering results. Most notably, our new Club World product, which is available on many of the airline’s longhaul routes, continues to push up yields and win market share from competitors.


“Whilst we are mindful of the challenging conditions ahead, we expect to see increasing financial benefits from our product, fleet and network strategy as well as from changes at Gatwick and to our shorthaul business.”


Lord Marshall, Chairman of British Airways, said: “This has been an encouraging year. The improvements in operating performance reflect benefits from our strategy and our market share gains are testament to the success of our new products.


“We continue to focus on improving the fundamentals of the business. However, in the short term, we are seeing the impact of the UK foot and mouth outbreak and positioning ourselves for slower world economic growth.”


The Annual General Meeting will be held at Le Meridien Grosvenor House, Park Lane, London at 1100 on Tuesday 17 July, 2001. The full Report and Accounts or Summary Financial Statements will be distributed to shareholders in the week beginning June 11, 2001 and from that time copies will be available to members of the public at the company’s registered office.


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