British Airways today reported pre-tax profits for the nine months to December 31, 1999 of £180 million, in line with market expectations. Operating profits for the nine months were £209 million and earnings per share were 13.7 pence, compared to 26.6 pence per share last year. Group losses before tax for the three months to December 31 were £60 million, representing a £15 million improvement on the same period last year.
In line with Group strategy, capacity growth has been reined back, premium traffic is showing good growth, traffic in the lowest-yielding non-premium passenger segments is being reduced, and cost efficiencies continue to be delivered. Passenger yields on mainline scheduled services improved in the quarter. Cost efficiencies from the three-year Business Efficiency Programme have now exceeded the £1 billion target.
Last week`s announcement of the airline`s comprehensive programme of product innovations in all cabins will revolutionise 21st century air travel, and set new standards of customer service and product on the ground and in the air. The first fully-flat bed in business class is already in the air. The embodiment of Club Europe will be completed in October. The new World Traveller Plus cabin will be introduced in July. The improvements to the First product begin in March, and the first redesigned Concorde will be in the air in the autumn.
The combination of the airline`s investment in the service delivered to customers, the biggest in airline history, and the commitment to reduce its cost base by a further 12 per cent over the next three years, will greatly enhance the airline`s competitive position. The company`s fleet strategy will add flexibility and allow the airline to reduce its exposure in those market segments where there is major price competition.
Bob Ayling, Chief Executive said: “These results, coupled with last week`s traffic statistics which showed premium traffic up 5.2 per cent, demonstrate that we are reading the market correctly and the trends are going in the right direction. We have seen premium traffic grow for the past seven months in succession. Our yields are starting to recover, showing the first improvement since the fourth quarter of 1997/98. Whilst conditions in the international marketplace continue to be highly competitive we look forward with confidence to future profitability.”
Lord Marshall, Chairman of British Airways, said: “The signs are encouraging for the medium term. We have made major changes to the business to strengthen the fundamentals, and we are now well placed to deliver the world-beating products that our customers expect.”