First-class and fuel surcharge help BA ride out oil surge |
|
|
Published
:
Fri, 05 Aug 2005 16:05
|
LONDON: Soaring fuel prices seem not to have touched the highflying British Airways. The airline reported a 36 percent rise in profits for first quarter ending June 30 and consequently raised earnings forecast for the year.
BA’s chief executive Rod Eddington said revenues could grow by 5.5 to 6.5 percent. The earlier forecast was between 4.5 and 5.5 percent. The positive performance during the first quarter was because of continuing cost cuts, better exchange rates and increased fuel surcharges which helped offset an expected jump in fuel bills. The airline expect their annual fuel bill to hit £525 million up from earlier forecast £450 million.
Also, business in ‘first-’ and ‘business class’ seats had picked up considerably, pushing profits up.
Operating profit for Q1 was £176 million (£129 million in last year’s Q1). Analysts and the market had expected around £140 million.
But Europe’s second largest airline wasn’t the only one to give positive news. BA’s low-cost rivals easyJet and Ryanair also showed how they could get round the sticky problem of rising fuel costs.
Irish-owned Ryanair chose not to impose fuel surcharge, unlike rivals like BA. This resulted in the airline beating market expectations with record Q1 profits reported earlier this week.
Oil prices have surged to a record 40 percent since January hitting the global aviation industry.
|
|
|
|
|
|
Print this Story
