In line with its fleet and network strategy aimed at bringing margin improvements, British Airways reported continuing slowing of capacity growth. Available Seat Kilometres (ASKs) growth on mainline scheduled services for May slowed to just 2.4 per cent. Capacity growth in June is expected to slow further to no more than 1 per cent.
As reported at the Preliminary results on May 25, short-term market conditions remain challenging. Passenger traffic, measured in Revenue Passenger Kilometres (RPKs), slipped 0.3 per cent. Premium traffic saw modest growth in Club World but, overall, fell by 1.9 per cent. Non-premium traffic was flat. Passenger load factor on mainline scheduled services thus fell by 1.8 points to 66.6 per cent. Cargo traffic on mainline scheduled services was 0.6 per cent lower, resulting in a 2 point decline in overall load factor to 63.5 per cent.
Highlights of the month
British Airways announced that it is developing radical new products which redefine longhaul business travel and set new benchmarks in comfort and design. The airline plans to create a mould-breaking “lounge in the sky” for the airline`s Club World passengers featuring completely flat beds, a new state-of-the-art entertainment system with bigger screens, in-seat power for lap top computers, e-mail, phones and fax. Further enhancements for all premium passengers are also planned.
British Airways took delivery of its 25th Boeing 777 aircraft, the jet which underpins the airline`s longhaul fleet and network strategy focused on improvement in margins and asset returns. The airline has 20 more Boeing 777s on firm order for delivery by 2002.
British Airways, American Airlines, Canadian Airlines, Cathay Pacific Airways and Qantas Airways welcomed Linea Aerea Nacional de Chile (LanChile) as the newest member of oneworld?. LanChile will be the eighth member of the global airline alliance and the third carrier (after Finnair and Iberia) to join since oneworld was announced last September.
British Airways announced successful conclusion of collective bargaining agreements with members of the International Association of Machinists (IAM) in the U.S. The IAM membership have voted in favour of agreements covering 1800 staff in customer service, reservations, engineering and telesales.
British Airways and Royal Bank of Canada (RBC) announced the launch of British Airways Global Financial Services. The first in a range of innovative products is the Offshore Deposit Account available from June 1 and provided by RBC`s international private banking arm.
British Airways officially opened its New World Cargo Centre fitted with state-of-the-art technology. Business will be transferred to the new facility progressively over the next 18 months, enabling an increased focus on higher-yielding loose freight and significant improvements to the customer offering. This should enable the achievement of better average yields and, at the same time the new technology and working practices are expected to lead to a 30 per cent productivity improvement.
British Airways reported pre-tax profits of £225 million for the year to March 31, 1999. Group turnover for the period was up 3.2 per cent at £8,915 million with operating profit at £442 million, in-line with market expectations. One of the key features of the results was the Business Efficiency Programme which continues to deliver strong results, and helped to deliver a unit cost reduction of 7.3 per cent, despite investment in customer service (which have improved punctuality and baggage performance), and one-off spending in preparation for Year 2000.