British Airways' Profits More Than Double

LONDON — British Airways said Friday it will pay a dividend for the first time in seven years after reporting its full-year profits more than doubled.

The carriers profits rose to 680 million pounds ($1.3 billion), from 290 million pounds in the previous 12 months.

Profit from continuing operations was up 59 percent to 696 million pounds ($1.35 billion).

Revenue rose 3.1 percent to 8.75 billion pounds ($17 billion).

The company said it would return 58 million pounds ($113 million) to shareholders, paying 5 pence (9.7 cents) per share.

British Airways shares rose 4 percent to 2233 pence ($4.53).

In the fourth quarter, British Airways said revenue rose 10.3 percent to 2.1 billion pounds ($4.1 billion), and it achieved a pretax profit of 95 million pounds ($185 million) despite fuel costs rising nearly 20 percent. The company did not break out details of its fourth-quarter performance.

Airline chief executive Willie Walsh said he would forego his bonus after a disastrous move to a new terminal at London's Heathrow Airport that left thousands of passengers stranded. And the airline warned results from the current quarter may be hampered by fallout from the Heathrow move and the soaring price of fuel.

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Walsh would have been entitled to a bonus of up to 700,000 pounds ($1.36 million) based on various performance targets, but he was under pressure to refuse it following the chaotic opening of Heathrow's Terminal 5 on March 27. Problems with the baggage handling system led to hundreds of flight cancellations and thousands of bags going astray.

British Airways now plans to begin moving long-haul flights to the new terminal in June.

"I felt it would be inappropriate in the context of the very disappointing opening of Terminal 5 in March," Walsh said in a British Broadcasting Corp. radio interview.

"So despite the fact it was a record year in terms of our financial performance, I advised the chairman that I thought it would be inappropriate."

British Airways operations director, Gareth Kirkwood, and customer services director David Noyes resigned following the fiasco. This week Mark Bullock, managing director of Heathrow's owner BAA, announced that he was stepping down.

British Airways predicted that revenues in the current year would rise by about 4 percent, which is at the lower end of its previously announced guidance.

"The first quarter will be particularly difficult," the airline said.

"Crude prices have risen from $58 per barrel in the first quarter last year to some $115 this year. The delayed transition to Terminal 5 affects both costs and revenue, and will feature in the quarter and full year as we deal with the challenges of the move into the terminal."

Walsh said talks continued with U.S. carriers American Airlines and Continental Airlines on possible "opportunities for cooperation."

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On the Net: http://www.bashares.com

Comments

[WIpatriot]

Maybe US airline CEOs should consider BA a best practice and go see what it is BA does to make a profit....wouldn't THAT be different?

[tippy6]

"Airline chief executive Willie Walsh said he would forego his bonus after a disastrous move to a new terminal at London's Heathrow Airport...", despite the airlines' excellent profits.

Wow. Some accountability from a top executive...what a concept!