Summary of the headline figures
Capacity in June, measured in Available Seat Kilometres, was 8.8 per cent below June 2000. Traffic, measured in Revenue Passenger Kilometres, fell 8.9 per cent. The reduction in traffic comprised a 6.0 per cent decline in premium traffic and a 9.3 per cent fall in non-premium traffic. Passenger load factor of 75.5 per cent was unchanged versus June 2000. Cargo, measured in Cargo Tonne Kilometres, fell by 6.8 per cent.

For the first quarter of the financial year, ASKs fell by 9.4 per cent, with RPKs falling by 12.2 per cent. Premium RPKs fell by 8.5 per cent with non-premium falling by 12.9 per cent. Passenger load factor fell by 2.2 percentage points.

Market conditions
Although trading overall continues to be difficult, June has proved more stable for British Airways than April and May, when passenger load factor fell by more than 3 percentage points in each month. It is too early to say if this is the start of a more stable trend. While disruptions at other carriers have had a positive impact on these figures, it is encouraging that the premium/non-premium mix continues to be favourable. Flat beds in Club World continue to deliver market share gains which are helping to offset the overall premium market weakness.

Costs
Reflecting the decline of sterling against the Yen, there will be a £23 million non-cash charge to revalue the yen debt in the first quarter results.

Fuel costs for the year are still expected to be around £100 million higher than last year.

Strategic developments

British Airways sold its no-frills subsidiary Go Fly Limited to 3i, in a deal worth up to £110m. British Airways received cash consideration of £80m, in addition to £20m of vendor loan notes and a potential deferred payment of £10m in the event of a subsequent sale of Go by 3i within five years. The sale was completed on June 14, 2001.

British Airways completed the fuel tank liner modification programme on one of its Concorde aircraft. The aircraft will now undergo extensive ground tests, which will be followed by engine and system tests and taxi trials before operational assessment flights.

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