Passengers ticket to 57% boost at BA gets
Tuesday 08 August 1995
Sir Colin Marshall, the chairman, reported sharply increased demand from passengers and gave a reassuring picture of the company's French and German joint ventures and of its stake in USAir, the American group that has returned to profit after a series of losses.
USAir recently broke off talks with its unions after hitting an impasse on pay and restructuring but still expects to reach $400m of cost savings by the end of the year, BA said. Sir Colin is backing USAir's decision to continue with the cost savings and to leave negotiations with the unions until after their contracts expire later this year.
This is the traditional method of collective bargaining in the industry, and BA sources suggested it could be more effective than the now-failed method of trying to negotiate a comprehensive package in advance of the expiry of contracts.
Sir Colin also said that losses had been reduced at Deutsche British Airways and TAT, the French venture, despite the weakening of sterling. The two lost pounds 90m last year.
Sir Colin dismissed suggestions that the lower-than-expected flotation price of the Australian airline Qantas, in which BA has a 25 per cent stake, could hit the British company. BA paid substantially more for its stake than the flotation price, but at that time the goodwill was charged to reserves, and the current book value is understood to be close to the market value.
Sir Colin said the passenger load factor of 73.5 per cent for BA was a first-quarter record, up from 69.3 per cent a year ago, and the number of passengers carried, at 8.3 million, was up more than 7 per cent.
There was also a significant increase in long-haul traffic compared with short-haul, and the average passenger flew further. BA increased its capacity 5.4 per cent but the revenue from passengers per kilometre travelled rose more than twice as fast. The company has had success in filling otherwise empty seats through its World Offers programme.
Sir Colin said demand remained strong and forward bookings were encouraging. But he added: "The industry remains intensely competitive and yields are expected to stay under pressure in real terms." He forecast more improvement in performance and greater benefits from the company's overseas alliances during the rest of the year to next March.
With volumes growing, selling costs were 14.4 per cent higher, mainly because of higher commissions to agents and credit card companies and computer reservation systems, all of which are directly related to the number of tickets sold.
But depreciation and aircraft operating lease costs fell 5.5 per cent reflecting the savings on 20 Boeing 737-200 leases that have been extended on reduced terms after the initial leases expired. BA shares rose 9p to 447.5 p.
Singer was ordered not to 'blow her rape whistle' in song 'Vegas'
Mr and Mrs Smith star admits she's 'never been comfortable on-screen'
Co-creator Mark Gatiss dropped some very intriguing hints ahead of the BBC drama's return next year
It is a crazy place to play in summer, writes Paul Scholes
It was all about Liz’s cocaine-fuelled brainwave, 'The Metwork'
- 1 American-born Boris Johnson refuses to pay hefty US tax bill
- 2 Lee Evans announces his retirement from comedy on The Jonathan Ross Show
- 3 John Smid: Former leader of US ‘gay cure’ group has just married a man
- 4 These grandmas smoking weed for the first time are wonderful
- 5 Pastafarian former porn star Asia Lemmon allowed to wear colander in driving licence photo
Duchess of Alba dead: Billionaire Spanish duchess who lived life by her own rules, dies at 88
These grandmas smoking weed for the first time are wonderful
Mike Nichols dead: The Graduate director dies suddenly following cardiac arrest
Woman opens professional cuddling shop – gets 10,000 customers in first week
US fire chief caught on camera 'refusing to help crash victims because they're black'
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Muslims pre-date Columbus in discovering America,' says Turkish president Erdogan
France 'blocks' Russian sailors from boarding a warship
Former Tory PM Sir John Major says 'we would not have an NHS without migrants'
Rochester by-election: Labour MP Emily Thornberry resigns after posting white van and England flags tweet
G20 summit: David Cameron warns Vladimir Putin that Russia's relationship with the West is at a 'fork in the road' over Ukraine
iJobs Money & Business
Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...
Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...
£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...