British Airways today unveiled first quarter results in line with market expectations. Pre-tax profits for the first three months of the year were £145 million, up £54 million (59 per cent) on a year ago, excluding one-off benefits.
Operating profit climbed by £33 million to £173 million (24 per cent), driven largely by the company’s Business Efficiency Programme which is on track to deliver £1 billion of annual efficiencies by the year 2000. Lower fuel costs and materially reduced losses in the group’s European subsidiaries also contributed positively. Turnover rose by 3 per cent to £2,288 million.
These good first quarter results were achieved against a less strong economic situation in the UK and the Far East. The strong pound is also helping European competitors to compete for transfer traffic in the UK market. Against this background the airline has cutback some services and experienced some reduced passenger loads. Reasonably strong growth continues in the USA and the major continental Europe markets.
9.5 million people flew with British Airways in the three months, with traffic up 7.6 per cent measured in revenue passenger kilometre (RPKs). Cargo tonnes rose by 6.6 per cent.
Unit costs (per available tonne kilometre - ATK) fell by 8.6 per cent year-over-year as a result of cost efficiencies and improved productivity, lower fuel prices, higher volumes and exchange rate changes. At 7.6 per cent, group operating margin improved by 1.3 points.
Commenting on today’s results, Bob Ayling, Chief Executive said: “This is a good set of results. Our three year Business Efficiency Programme (BEP) is on track ensuring that we remain in a strong position to meet the challenge of external pressures. As the airline market becomes more competitive we will continue to improve efficiency to safeguard continuing investment in our products, our ground services, and our people.”