British Airways reports record H1 profits
02 November 2007UK flag carrier, British Airways (BA), reported record first-half profits on Friday and also said it was "on track" to reach a 10 per cent operating profit margin for the first time. According to chief executive Willie Walsh, "We see every possibility of achieving our 10 per cent operating margin by March 2008. Our business plans for the future are gaining real momentum."
However, BA shares dipped in early trades after the carrier revised downwards its forecasts for both revenues - which are slated to rise by 3-3.5 per cent - and costs for the full year - slated to fall by £100m.
The airline has moved to renew its long-haul fleet and has recently placed large orders for Airbus A380 superjumbos as well as Boeing 787 Dreamliners. It is also due to move into the new Terminal 5 at Heathrow airport by March 2008.
Pre-tax profits in the first six months of the financial year to the end of September rose by 26 per cent to £593m, in line with market expectations. Operating profits rose from £442m to £556m, while the operating margin in the first half, seasonally the strongest trading months of the year, increased from 9.8 per cent to 12.5 per cent.
Walsh said the airline''s fuel bill for the full year was expected to exceed £2bn for the first time and remained "a major challenge".
Passenger revenues fell slightly to £3.9bn, while average fare levels rose by 0.5 per cent due to more premium passengers travelling. BA said that the volume of premium passengers had increased by 2.5 per cent.
The cargo business had had a "disappointing" performance, with revenues falling by £290m. The drop in cargo volumes was being driven by tougher competition and lower yields in Asia Pacific, Europe and the UK.