BA Posts Profit As Premium Traffic Returns

October 29, 2010

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British Airways expects to deliver further growth in 2011 after posting its first profit in two years, helped by cost cutting and improved demand for premium class travel in the first half.

BA, whose merger with Spain's Iberia is due to complete in January, reported a pre-tax profit of GBP£158 million for the six months to September 30 compared to a loss of GBP£292 million in the same period last year.

The airline's revenues grew 8.4 percent to GBP£4.44 billion, while its yields jumped 17.2 percent as businesses loosened the purse strings on their travel budgets.

First and business-class travel -- the most profitable part of BA's passenger business -- has increased steadily in recent months.

Operating costs were cut by 1.5 percent during the period.

"While positive, the economic environment continues to be subject to uncertainty, to which the increase in Air Passenger Duty is unhelpful," said BA's chief executive Willie Walsh. "We continue to focus on managing our costs."

Global airlines have increased their profit forecasts this year as the recession fades and traffic rises.

IATA expects the industry to post a net profit of USD$8.9 billion, more than treble its previous forecast.

BA last posted a profit in August 2008.

(Reuters)