Strategic Meetings Summit London, 26 September,
September 29 2022, Kimpton Fitzroy London
Friday 30 September 2022, JW Marriott Grosvenor
British Airways (BA) announced today (16 May) it made ”883m ($1.7bn) profit in the year to 31 March ” up 45% from 2007 ” but warned the shambolic Terminal 5 opening would affect its next set of results.
It also confirmed its new OpenSkies transatlantic subsidiary will launch on 19 June from Paris Orly to New York JFK ” despite the fact it is about to meet pilot union Balpa in court on Monday about possible strikes.
The huge profits mean shareholders in the flag carrier will see their first dividend since 2001 and staff will share a ”35m bonus ” although BA chief executive Willie Walsh said he will not take a bonus himself because it would be inappropriate.
”In the context of the disappointing T5 opening he didn”t feel it would be appropriate to take it,” a BA spokesman told ABTN. ”It would have been a year”s salary - ”700,000.”
Walsh said: "Despite the difficulties of the opening of T5 in the first few days, it is now working well and some two million passengers have gone through it and many have enjoyed the experience.”
The delayed transition to T5 ” the next long haul switch is on 5 June, but the last takes place in 2009 - affects both costs and revenue, and will hit the financial quarter and full year figures. The recent increase in fuel surcharges will ”broadly offset both further weakness in non-premium long haul travel and the impact of the delayed move to T5” said the company statement.
Despite BA”s fuel bill rising ”124m as crude prices shot from $58 to around $115 per barrel, operating costs actually fell 0.7% due largely to a lower overall wage bill ” although manpower at Heathrow increased, cuts meant overall the workforce was reduced.
Plus, the carrier has hedged a significant amount of fuel - 72% for the first half of the year and nearly 60% for the second.
One-off payments to the US Department of Justice because of anti-competitive behaviour ” it was fined for price-fixing fuel surcharges between 2004 and 2006 (Virgin also breached the law) ” hit the company”s cash balance, which was down ”491m on last year.
Traffic in premium cabins increased by 4.4%, and long haul non-premium traffic has been ”weak” since August. Overall, yields rose 3.6% due to an improved mix of premium traffic and higher fuel surcharges.
Walsh added that BA is still considering partnerships with US airlines: "Earlier this month we announced that we were in talks to explore opportunities for cooperation with American Airlines and Continental Airlines. These talks continue."
The airline says it is ”working closely” with Boeing after the manufacturer announced delays to its 787 delivery schedule (BA has 24 on order with options for a further 18) but regarding the Airbus A380, a spokesman told ABTN that ”we don”t have any due until 2012 ” we don”t” think with [Airbus”] revised plans there will be any significant change to our delivery schedule.”
It has 12 on order with options for seven more.