Half-year profits £240million
British Airways today unveiled pre-tax profits for the second quarter ahead of expectations at £70m, excluding severance and disposals. Pre-tax profits for the six months to 30th September 1999 were £240m, compared with £385m for the same period last year. This included £191 million of profits on disposals, primarily from the sale of the remaining interest in Galileo International Inc., during the first quarter.
Operating profits for the six months were £211 million and earnings per share were 20.3 pence per share, compared to 33.2 pence last year. A dividend of 5.1 pence per share has been declared, unchanged from last year.
Cost efficiencies from the three year Business Efficiency Programme have now topped the £1bn per annum target. Further profit improvements of £225m are expected for the full year.
Investment in products and services for customers has also increased, focused on unbeatable premium and economy products for the year ahead and beyond. New products include the Next Generation Club Europe launched in September; Club World Flying Beds from 1st March 2000 and the upgrading of Concorde from next September.
With these investments and the continuing company-wide programme of training and motivation, British Airways will continue to deliver the highest standards of customer service. Customer service indicators - including punctuality and baggage handling - have improved over last year. British Airways is now the most punctual major airline in Europe.
Bob Ayling, Chief Executive said: “It has been a tough year for the international airline industry but our strategy puts us in a position to benefit strongly as business picks up. Other airlines are now following our lead in cutting capacity and this will help close the gap in demand. Already, our actions have helped to deliver a good yield performance relative to our competitors and we expect this to continue. And we are making significant investments in our products and services which will give us an unbeatable competitive advantage in the years ahead.”
Lord Marshall, Chairman of British Airways, said: “Whilst the immediate outlook is challenging, the positive actions of the management in changing the fleet and network strategy and the continued focus on customer service and cost efficiency, will restore the profitability of the company.”