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Traffic and Capacity Statistics from British Airways

Travel News Asia Date: 6 June 2000

Summary of the headline figures
Traffic, measured in Revenue Passenger Kilometres, rose by 4.2 per cent in May. Premium traffic grew by 10 per cent and non-premium traffic grew by 3.2 per cent.

Capacity, measured in Available Seat Kilometres, grew by 1.4 per cent, with the majority of the growth occurring in Americas and Africa and Middle East. With traffic up 4.2 per cent, passenger load factor rose 1.8 points. Non-mainline statistics reflect the sale of Air Liberté, with traffic and capacity excluded with effect from April 1, 2000.

Market conditions
As stated in the preliminary results announcement, expected market conditions for the key summer season give cause for cautious optimism.

Costs
Work continues on the nine strategic initiatives to reduce costs. Expenditure on new products for World Traveller, Club World and Club Europe in the fourth quarter will continue to be a feature of selling and marketing costs in the course of the current financial year.

Strategic developments
British Airways completed the sale of its 86 per cent shareholding in the parent company of Air Liberté to Taitbout Antibes BV. British Airways’ net cash proceeds from the sale are FFr457 million (£40 million). Accounting rules require purchased goodwill previously written off to be reinstated, which has led to a loss on disposal of approximately £56 million in the first quarter. The net effect of the disposal has been to increase reserves by £117 million, and improve the net debt to total equity ratio by 1.2 points and eliminate the continuing trading losses of Air Liberté.

In conjunction with ten other major airlines, British Airways announced the creation of the first European, multi-airline, on-line travel agency. The new site will offer the public access to the most up-to-date fare information, including the airlines’ lowest branded fares. Passengers will also be able to book hotels, car hire, insurance and other travel services through the site.

British Airways launched a new range of business fares on domestic routes between the UK regions and London, and on twelve longhaul routes for Club World and First. These fares will offer businesses a wider range of fares, to take account of differing needs for flexibility and time of travel.

British Airways has agreed to sell its 14.1 per cent stake in Hogg Robinson to the management buy-out consortium. Should the sale be successfully completed, British Airways will recognise a £4.9 million profit on disposal.

Three new Board Directors have been appointed to the British Airways Board. Rod Eddington has joined the Board as Chief Executive. Martin Broughton, Chairman of British American Tobacco p.l.c. and Dr Martin Read, Managing Director and Chief Executive of Logica plc, have been appointed Non-Executive Directors. Sir Michael Angus, currently Non-Executive Deputy Chairman, will step down from the Board at the Annual General Meeting on July 11, 2000.

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