British Airways today unveiled pre-tax profits of £225 million for the 12 months to March 31, 1999, broadly in line with market expectations.
Group turnover for the 12-month period was up 3.2 per cent, at £8,915 million, on a flying programme 12.1 per cent larger in available tonne kilometres (ATKs). The general economic slowdown, coupled with relatively weak demand in the premium passenger market and industry-wide price discounting, produced an operating profit of £442 million (1998: £504 million).
For the three months to March 31, 1999, pre-tax losses were £85 million.
In the current year, British Airways is investing to stay ahead of the competition and lead the world airline industry with the introduction of innovative new products and levels of service. All of our 64,000 employees are going through our Putting People First Again initiative in order to improve service standards. This will be complemented by a steady stream of product improvements during the year. An example is the airline’s new “flying bed” for business passengers, unveiled today. This revolutionary product will create a “lounge in the sky” for Club World passengers. The airline is launching a new and improved product for First, Club Europe and Concorde customers later this year.
The Business Efficiency Programme continues to deliver strong results, with unit costs falling 7.3 per cent compared to the same period last year. Productivity for the period was up 6.3 per cent. This improvement was achieved despite the investment in customer services (which have improved punctuality and baggage performance), and one-off spending in preparation for Year 2000.
Bob Ayling, Chief Executive, said: “The outlook for the company is good and the outlook for our passengers is even better. Both on the ground and in the air, we are introducing new premium products. These, along with a brand new fleet of aeroplanes, are tailored to the most profitable sections of the market. This strategy will ensure that we stay ahead in the premium sector of the market while reducing our exposure to the heavily discounted element of the economy sector, thereby driving future yields and margins up. We have a decisive competitive advantage over our competitors thanks to our internal cost efficiency programme and fleet strategy which is focused on profitability rather than volume.
“We will continue to set the pace in this industry.”
Lord Marshall, Chairman, said: “We can look forward with confidence to a strengthening performance in the medium term as we continue to adapt well to changing market conditions. As deregulation continues, our dual track approach to premium and economy traffic will allow us to build on our competitive advantage.”
The Annual General Meeting will be held at the Barbican Centre, London, on July 13, at 11am. The full report and accounts or summary financial statement will be distributed to shareholders in the week beginning June 7 and from that time copies will be available to members of the public at the company’s registered office.