BA swings to profit as premium traffic returns


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 completes in January, on Friday reported a pretax profit of 158 million pounds for the six months to September 30 compared to a loss of 292 million pounds in the same period last year.

The airline’s revenues grew 8.4 percent to 4.44 billion pounds, while its yields — profitability per mile that a paying passenger travels — jumped 17.2 percent as businesses loosened the purse strings on their travel budgets, Reuters reports.

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 hiked their profit forecasts this year as the recession fades and traffic rises.

IATA expects the industry to post a net profit of $8.9 billion (5.5 billion pounds), more than treble its previous forecast.

BA last posted a profit in August 2008, prior to the financial crisis triggered by the collapse of Lehman Brothers.

Shares in BA, which have risen 50 percent in 2010, closed at 280.70 pence on Thursday, valuing it at around 3.2 billion pounds.