BA Profits Lift-Off as the Premium Cabin Fills Up
Byline: ROBERT LEA
BRITISH Airways is on course to reveal its biggest profits since the turn of the millennium as returning first class and business class passengers, plus a controversial fuel surcharge on ordinary passengers, offset the soaring oil price.
For the nine months to the end of December, BA said pre-tax profits came in at [pounds sterling]410 million, more than double the [pounds sterling]185 million reported in the same period in 2003.
For October to December, profits were [pounds sterling]50 million down on the previous year at [pounds sterling]75 million, but chief executive Rod Eddington called the numbers "respectable", given a year-onyear [pounds sterling]106 million rise in the fuel bill, an increase of nearly 50%.
Yet, despite the continuing high cost of fuel, a raft of data from the flag carrier indicates BA is in line to report its best annual profits in the year to the end of March since 1999, when pre-tax earnings last topped [pounds sterling]400 million.
Though the current January to March trading quarter is traditionally BA's toughest, latest figures reveal a 12% leap in the number of passengers flying first and business class.
Moreover, chairman Martin Broughton has upgraded BA's revenue outlook for the year to an increase of between 3% and 3.5%, ahead of the previous 2% to 3% signalled to the City.
Yields - the average fare per passenger - are also looking far better with a fall of 1.9% in the Christmas quarter against the 5.1% dive during the first half of the year.
Having taken out hedges to offset the worst effects of the rising oil price, Broughton said he is sticking to previous forecasts that BA's fuel bill will rise by [pounds sterling]245 million this year - much of which is offset in any case by its fuel surcharges on tickets. …