Half-year profit shows BA up to flying high again

Oct 30 2010 by Iain Laing, The Journal

BRITISH Airways boss Willie Walsh says the airline has turned the corner after making a half-year profit for the first time in two years.

It achieved pre-tax profits of £158m in the six months to September 30, whereas it made a pre-tax loss of £292m in the same period a year ago.

The milestone was reached despite disruption to flights caused by the ash cloud from an Icelandic volcano and strikes by cabin crew during the period.

Passenger numbers were down 6.2% in the half year, but picked up towards the end of the period with a 4.3% increase in September.

BA was helped by the economic recovery, which has seen an increase in sales of business class tickets as well as a major cost-cutting drive.

Confident that the economic recovery would continue, Walsh announced plans to increase capacity by 4% or 5% next year.

“We are benefiting from an improved economy, which we hope will pick up in 2011,” said Walsh. “We don’t see any evidence to support a double dip.”

Although bullish about BA’s prospects, Walsh slammed next week’s increase in Air Passenger Duty, which will rise by 55% on the longest flights.

“We believe the levels cannot be justified and are having a negative effect on the economic recovery in the UK,” he added.

It would cost BA an extra £100m in taxes and put further pressure on pricing.