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BA profits soar 45% despite rising fuel costs
British Airways saw pre-tax profits rise to £883 million from £611 million the previous year despite rising fuel prices and a “significant economic slowdown” in the last six months.
BA is to review operations from the winter schedule and may cut services.
Chief executive Willie Walsh has turned down a £600,000 bonus in the wake of the disastrous Heathrow Terminal 5 opening but Ba staff are to share a £35 million bonus.
The airline revealed that two million passengers had use T5 since its opening at the end of March.
BA also confirmed that its OpenSkies subsidiary would start flying between Paris Orly and New York from June 19.
The airline described the coming year as “challenging” due to the uncertain economic outlook and revealed that capacity, costs and network were all under review.
Revealing revenue up 3.1 per cent to £8,753 million for the year to the end of March and full year fuel costs topping £2 billion, Walsh said: “We have achieved our goal of a ten per cent operating margin which I am delighted has triggered the reward scheme for our staff. For our shareholders too, it signals the welcome return of a dividend – the first since 2001.
“Delivering ten per cent has not been easy, but we have achieved it by remaining focused on our strategy for the last six years.
“We tackled our pension deficit and we have strengthened the fundamentals of our balance sheet while at the same time growing a profitable business.”
But he added: “We operate in a volatile market and this year has been no different. Against the background of a progressively tougher trading environment we have continued to work hard on our cost savings to deliver these strong results.
“Fuel prices have hit record highs and continue to climb, driving some airlines into bankruptcy and putting pressure on others.
“Despite the difficulties of the opening of Terminal 5 in the first few days, it is now working well and some two million passengers have gone through it and many have enjoyed the experience.
“Phase two of the move of our long haul services into the terminal begins on June 5 and will include our blue riband New York services and flights to seven other destinations.
“Earlier this month we announced that we were in talks to explore opportunities for co-operation with American Airlines and Continental Airlines. These talks continue.”
by Phil Davies
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