British Airways mainline scheduled passenger traffic in the month, measured in revenue passenger kilometres (RPKs), showed growth of 7.6 per cent from last year. This represented the strongest rate of growth since last June.

Traffic was particularly strong in UK/Europe where the growth rate of 10.2 per cent surpassed the rate of capacity growth of 10.0 per cent and resulted in a marginal improvement in the passenger load factor. On the longhaul routes, there was good traffic growth in the Americas and Africa region, but softness in the Middle East and Asia Pacific regions held back the rate of growth in traffic to 7.0 per cent.

With total mainline scheduled capacity measured in available seat kilometres (ASKs) up by 10.1 per cent, the passenger load factor for mainline scheduled services showed its smallest decline since last July with a reduction of 1.6 points to 68.3 points.

Premium traffic in May grew by 2.3 per cent with the main cabin showing good growth of 8.6 per cent.

HIGHLIGHTS OF THE MONTH

British Airways announced its preliminary results for the full year 1997/98. Driven by the Group’s Business Efficiency Programme (BEP) which delivered some £250 million of cost efficiencies, pre-tax profit for the year was down just 9.4 per cent to £580 million compared to the previous year’s record levels. This was despite the Summer’s industrial dispute which cost an estimated £125 million and the strength of sterling, which at the pre-tax level, cost the Group £180 million.

The Board has recommended a final dividend of 11.9 pence per share bringing the total for the year to 16.6 pence per share - a rise of 10.3 per cent.

The High Court in the UK refused easyJet’s request for an injunction against ‘go’, British Airways’ new low-fare, point-to-point airline. Whilst there will be a further hearing at some time in the future, ‘go’ operated its first flight from London Stansted to Rome on May 22nd as planned.

The US Department of Justice (DoJ) issued its advice to the US Department of Transportation on the suggested remedies for anti-trust immunity for the proposed alliance between British Airways and American Airlines. This represented a further step along the regulatory road for gaining approval of the alliance. The DoJ’s advice suggested that sufficient slots should be made available at Heathrow for 14 new daily services to the US, to remedy the competition aspects of the alliance. In a separate matter not directly related to the proposed alliance, the DoJ also suggested that a further 10 weekly slot pairs be made available to US carriers to remedy what it saw as a disadvantageous position for US carriers as a result of the existing bilateral air services agreement between the UK and the USA.

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