BA profits up 57%

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The Independent Online

British Airways said today it made pre-tax profits of £195 million in the three months to the end of June - an increase of 57 per cent on a year ago.

The airline said the improvement came despite a 44 per cent jump in fuel costs to £512 million and a 7 per cent rise in employee costs, mainly due to pension commitments.

Chief executive Willie Walsh said that BA's recent low fares offer in the short-haul market had been a "big success", despite "brutal" competition.

Today's first quarter results are at the top end of market forecasts and ahead of average predictions in the City for profits of £182 million.

In May, the company announced annual pre-tax profits of £620 million, up from £513 million a year earlier. That led to a £48 million bonus for staff and came after strong demand for services to India and China.

Revenues in today's first quarter figures were up by another 12.5 per cent to £2.3 billion, prompting BA to revise its guidance for the full year to between 6 per cent and 7 per cent, compared with a previous estimate for between 5 per cent and 6 per cent.

Mr Walsh said the issue of the airline's pension problem would be discussed with trustees this month and next month.

He added that he could see conditions for BA getting tougher as the year went on, as there would be more competition on prices and "currencies will go against us".

Mr Walsh said BA's recent punctuality figures had to be considered against the fact that the airline bases statistics on flights taking off exactly on time while airline industry figures are based on flights taking off within 15 minutes of schedule.

On the industry criteria, BA's flight punctuality is around 74%-75% at the moment, Mr Walsh said.