British Airways today announced a pre-tax profit of £415 million for the year toÊMarch 31, 2005 (2004: £230 million profit). There was a pre-tax profit for the fourth quarter of £5 million (2004: £45 million profit).ÊOperating profit for the year was £540 million (2004: £405 million profit). The operating margin was 6.9 per cent (2004: 5.4).Ê The operating profit for the fourth quarter was £40 million (2004: £32 million profit).ÊNet debt at £2.9 billion fell by £1.2 billion during the year and is at its lowest level since 1993. Cash inflow, before financing, was £1.2 billion, an increase of £307 million.
Rod Eddington, British Airways chief executive, said: “These are good results driven by continued cost control and strong demand for our products.Ê Seat factors are at record levels, but yield, down 4.4 per cent, continues to be under pressure and is down for the third year running.Ê
“We have exceeded our 2003 -2005 business plan savings of £450 million by £7 million.ÊThis included reducing external spend by £300 million and improving our use of technology.Ê During the year we have substantially improved our online capability to improve customer service and increase the airline’s efficiency.”Ê
Mr Eddington added: “Self-service check-in has reached an all time high with nearly 600,000 passengers a month using our kiosks at airports. Online printed boarding passes are now accepted at 41 airports across our network and more than 40,000 customers a month choose to print their boarding passes from their home or office.Ê
“British Airways has won an innovation award for its online “manage my booking” facility.Ê This allows customers to select a seat, choose a special meal, add their Executive Club details to their booking and email their itinerary to friends. Usage of e-tickets has grown from 41 per cent to 76 per cent - the highest usage of any network airline outside of the United States.”
“We have achieved a 6.9 per cent operating margin which is up 1.5 points and the best margin since 1997.Ê As a result this has triggered our employee reward programme.Ê All our staff will receive a bonus for their efforts, the first time such a payment has been made since 1998.”
Martin Broughton, British Airways chairman, said: “Market conditions remain broadly unchanged. For the year to March 2006, total revenue is expected to improve by 4-5 per cent, up from 3-4 per cent due to the impact of the latest fuel surcharges. Capacity and volumes are expected to increase by about 3 per cent with total yield flat.
“Fuel costs, net of hedging, are now expected to be about £400 million more than last year, up from £300 million due to recent price rises.
“As announced in our latest business plan, our focus is on preparing for the move to Terminal 5 at London Heathrow in 2008, investing in products for our customers and continuing to drive simplification to deliver a competitive cost base.”