BA revenue boost lifts terrorism gloom

Click to follow
The Independent Online

British Airways reported the first signs of an improvement in revenues yesterday since the 11 September terror attacks on America more than two years ago.

The upbeat statement helped offset the latest terrorist fears surrounding the airline industry and prompted a 5 per cent rise in BA shares to 242p.

BA said the improvement in the revenue outlook was being driven by the increased volumes of premium passengers on long-haul routes, both across the Atlantic and to other destinations. There was a 4.8 per cent increase in traffic in December, comfortably outstripping the 2.3 per cent rise in capacity. This produced a rise in load factors of 1.7 points to 73.3 per cent and also helped strengthen yields.

George Stinnes, BA's head of investor relations, said the latest traffic figures were heartening because it was the first time since 11 September 2001 that BA had had anything positive to say about the revenue outlook. "The market is not strong by any stretch of the imagination but to see signs of an improvement in revenues after a £1.9bn fall in income could be the start of the very long climb back," he said.

BA said at the time of its interim results last November that it expected revenues for the second half of the year ending in April to be higher than the corresponding period last year. However, it still expected revenues for the year as a whole to be lower. Analysts expect BA to report operating profits of about £220m for the current year, although they are likely to upgrade their forecasts on the basis of the airline's bullish noises on revenues.

Although long-haul revenues in premium cabins are improving, BA cautioned that short-haul premium traffic volumes remained weak and below last year's levels, while economy class passenger volumes remained very sensitive to yields across the board.

Comments