Commenting on British Airways' (BA) preliminary results

Published:

22/05/2009

Topic:

Press Release,Flights

Commenting on British Airways' (BA) preliminary results, Bob Atkinson, travel expert at travelsupermarket.com: 

"travelsupermarket.com predicted that the final quarter would be BA's most difficult -  and today's announcement confirms this.  However, despite an overall loss before tax of £401 million for the year to 31 March, customer confidence in the airline is at an all time high, with BA's investment in Terminal 5 now paying off with customers.

"In the current economic downturn, passengers are downgrading from premium classes, while business travellers are also looking for lower cost alternatives. Along with increased fuel costs, BA's bottom line, like many other airlines' has taken a hit, as BA is clearly going for load factor over yield. In other words, less money per customer, per seat sold.

"Moving forward, BA still has some incredible challenges ahead of it. Key areas include:

• Fuel and currency - can BA successfully manage to keep a lid on sky high fuel prices and problems with the value of sterling versus the euro and US dollar? And if they don't, what will the implications be for consumers? 
• Fleet size - BA is grounding up to 16 aircraft in the second half of 2009, which will have a knock on effect meaning either the cancellation of existing routes and/or reduced frequency
• New route launches - with new direct services to Las Vegas, Montego Bay and Punta Cana, plus a new business class service from London City Airport to New York, can BA make a success of these routes in the current economic climate?

"All of the above, combined with the fact decisions on relationships with American Airlines and Iberia are still pending, suggest BA is carefully monitoring its business model.  Known for providing a premium product, BA has recently been reducing many of its fares in both economy and premium cabins. Whilst this is helping to drive load factors, can BA sustain lower revenue per passenger in the coming months or will the consumer simply benefit from a premium product at a low cost price?"

-Ends-

A full copy of BA's results can be found at: http://www.britishairways.com/travel/bapress/public/en_gb

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