British Midland profit soars 24% to £4.4m

British Midland, Britain's second-biggest airline, saw a 24 per cent rise in profits last year due to a surge in traffic on its London to Paris route.

However, competition from the Channel tunnel was a real threat that would hold back passenger growth on Europe's busiest airline route, said Sir Michael Bishop, chairman.

With the Channel tunnel not expected to reach full capacity until the summer, the real battle between the airlines and Eurotunnel has yet to begin.

Sir Michael plans to counter the extra competition by launching services to two new European destinations this year, though he is not saying where until later in the year.

However, airlines' expansion strategy is to push into areas beyond the reach of Eurostar, and that probably means Midland will fly middle-to- Eastern Europe.

Sir Michael said: "Airlines should not expect to see another rise in London-Paris traffic. We will be on a plateau for a couple of years until the market absorbs the extra traffic."

The company made pre-tax profits of £4.4m in 1994, against £1.1m, and Sir Michael predicted further growth in profitability this year. An 11 per cent increase in total revenues produced a rise in the airline's turnover from £371.1m to £404.5m.

Midland's increase in revenue is well ahead of most other European airlines, which Sir Michael said was due to several code-sharing agreements the company signed last year.

Passenger capacity increased only 2 per cent, leading to an improved load factor of 61.4 per cent, against 56.3 per cent.

Midland, 40 per cent-owned by the Scandinavian airline SAS, saw passenger growth on international and domestic routes, with services to Belfast and Frankfurt growing strongly.

Total passengers on cross-border routes rose 22.7 per cent, which meant that for the first time international routes were responsible for more than half of all revenue - up from 50 to 56 per cent.

On the domestic front, passenger numbers on routes from Heathrow to Leeds- Bradford and Teesside increased 8 per cent, reflecting the summer rail disruption.

Midland has had talks with Eurostar, which operates the London-Paris Channel tunnel service, about cross-ticketing to enable passengers to be flexible about using a plane or train.

Sir Michael said he was keen to go ahead with the idea but Eurostar had made no decision.

Airline subsidies would remain an issue, and Sir Michael said he would oppose plans to approve £700m in aid for Spain's Iberia.

Midland is one of several private sector airlines taking legal action against EC approval for subsidies to Air France.

Start your day with The Independent, sign up for daily news emails
News
Hillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
Sport
wimbledonScot will face Ivo Karlovic next
Life and Style
Kissing
life
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test