British Midland Plc today, 15 April 1999, reported its highest ever turnover and record passenger numbers for the year ending 31 December 1998. Key highlights of the year include:
* Turnover increased by 3 per cent to £558.8 million (1997 - £542.9 million)
* The total number of passengers carried increased by 5 per cent to 6 million (1997 - 5.7 million)
* Pre tax profits of £11.02 million (1997 - £16.7 million)
The results were achieved in particularly challenging market conditions which have seen weakening yields since the late summer of 1998, and intensive competition in all sectors of the scheduled airline market throughout the year.
Despite these factors, British Midland`s pre-tax profits were the second highest since the airline embarked on its major European expansion programme in the late-1980s. Passenger numbers grew in line with the industry average.
1998 saw the commencement of the airline`s $1 billion aircraft investment programme with the successful introduction of 4 Airbus A321`s into the British Midland fleet.
At the end of the year, the airline also announced an order for 10 Embraer EMB 145 Regional Jet aircraft, with options for a further 10, to widen its destination and service options from UK regional airports. At the same time, the airline announced it had secured delivery options for either two Boeing 767-300 or two Airbus A330 -200 aircraft to commence transatlantic operations.
In line with the airline`s clear strategy of bringing much-needed competition to major routes, British Midland broke Europe`s biggest monopoly route with the introduction of competitive services between London Heathrow and Manchester in March 1998. The airline also added a competitive impetus to the existing duopoly by introducing a daily return service to Warsaw from Heathrow.
The airline will, in 1999, continue its strategy of expanding further into Europe with the launch of services to Budapest and Moscow, as well as adding a second daily service to its existing route to Warsaw.
In March 1999, in cooperation with Lufthansa, British Midland introduced services from London Heathrow to Stuttgart and Hanover and from Edinburgh to Frankfurt; as well as flights from Manchester to Dusseldorf introduced in September 1998.
Licenses to serve New York, Washington DC, Boston and Miami, were granted by the Civil Aviation Authority (CAA) in March 1999. Introduction of services is subject to the conclusion of a new UK/US bilateral air agreement.
Sir Michael Bishop Chairman said:
“The global economic climate resulted in weaker trading conditions than in 1997, which was reflected in the profitability of our business. Despite the deterioration in scheduled airline market yields, widely reported throughout the industry in the last half of 1998, I am delighted that we still achieved record turnover and passenger numbers.
“We remain fully committed to our strategy of continued investment in aircraft, new routes, products and services.
“Over the period of our major expansion programme we have brought much-needed competition to key European destinations and have built the business into the force it is today. We are now ideally placed to face future challenges - both within Europe and to the US - but we must be allowed the headroom to offer these benefits to even more travelers on even more routes.”