Sir Colin Marshall, BA's chairman, said that despite continued excess capacity in the airline industry and trading down by customers, the results reflected some encouraging signs of economic recovery in several BA markets, particularly the UK, as well as the benefits of a weaker pound.
During the half-year to 30 September, BA carried 15.4 million passengers, an increase of 12.1 per cent. But this was outstripped by extra capacity laid on for the summer months, and BA's passenger load factor - a measure of capacity use - fell by 1.8 points to 72.8 per cent.
Against that, passenger yields - the revenue from each seat - rose by 4.9 per cent following the devaluation of sterling last autumn and the return of premium fare paying customers, whose numbers rose by 2 per cent in the second quarter after a year of steady decline.
The fall of the pound diluted the effects of further cost cutting by boosting fuel costs. Productivity rose by 8.5 per cent. BA expects to take a further pounds 150m out of costs by next March, on top of the pounds 450m removed in the previous two years.
Its programme of building alliances with other airlines has proved more costly than expected. A non-
operating loss of pounds 29m in the second quarter was largely the result of heavy losses at the French TAT European Airlines, in which BA holds a 49.9 per cent stake.
The interim dividend, adjusted for the effects of BA's pounds 440m rights issue in May, is 8.5 per cent higher at 3.18p. BA shares closed 2p down at 397p.
Bottom Line, page 32
(Photograph omitted)Reuse content