BA revenues rise despite discounts

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The Independent Online

British Airways yesterday reported a rise in revenues for last month despite heavy fare discounting and a bigger fall in the number of passengers carried.

The airline attributed the improvement to record load factors with more of its aircraft flying full than ever before. BA's cargo division also performed well.

Traffic levels in March were 3.1 per cent down on the same month last year compared with a 2.5 per cent drop in February. However, passenger load factors were up by 6.2 percentage points to a record 75.7 per cent, thanks to BA's strategy of cutting the number of seats available. Capacity last month was 11 per cent less than in March 2001.

The recovery in air travel reflected in the BA figures was mirrored by traffic statistics issued by two other flag carriers. The Dutch airline KLM said that overall traffic levels in March were down by just 1 per cent while United Airlines reported a 13 per cent drop in passengers but a 4.5 point improvement in load factors to 77.5 per cent.

BA said it had achieved more than half the 13,000 job reductions announced since 11 September, with the workforce down by 6,700 compared with last August. Most of the job cuts have been achieved through natural wastage, meaning that severance costs for the financial year just ended are forecast to be about £80m.

BA also announced the sale of a majority stake in its Indian-based division which handles back-office tasks such as accounting. The private-equity group, Warburg Pincus, has bought a 70 per cent stake in the business, World Network Services, for about £10m. The division has 1,500 staff, almost all of them located in India.

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