BA raises full-year revenue forecast
Published: 10 Nov 2008
British Airways remains focussed on delivering a small operating profit in the current financial year and sustainable profitability in the medium and long term.
The airline indicated the same as it shared its interim management report for the six months ended September 30.
"The industry continues to face very difficult trading conditions on the back of a weak economic environment. Yield improvements, due mainly to price and exchange, are expected to more than offset volume reductions. Overall we now expect revenue to grow by at least three percent, an increase on our previous guidance of a three percent increase," stated the airline.
Shares of British Airways rose Friday by the most in at least 20 years after raising its revenue forecast. The airline's stock advanced 28.6 pence to 159.10 pence in early trading in London, the biggest jump since at least Sept. 12, 1988. It later retreated to 144.2 pence, up 10.5 percent.
British Airways said it would reduce its summer schedule by one percent to save money as traffic declines. The carrier made the changes as it said fiscal first-half sales rose 6.4 percent to £4.75 billion, beating the average analyst estimate of £4.57 billion. Operating profit also surpassed analysts' estimates even as the carrier reported a net loss of £49 million, compared with net income of 493 million pounds a year earlier.
"The six month period will be remembered as one of the bleakest on record," said airline's chief executive Walsh. "The period was hit by a crisis in the banking sector, record fuel prices and several airlines going out of business."
Walsh said talks with Spanish carrier Iberia continued, and that BA was also speaking with CAI, the consortium of Italian investors set up to salvage Alitalia.
"Just to make it clear, however ... we are not talking about any equity stake in the new company," Walsh said of the Italian airline. "They have been clear to us that that does not represent an impediment to a potential relationship."
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