British Airways Interim results

* Pre-tax profit of £5 million for the quarter * Operating profit of £72 million for the quarter * No interim dividend declared * Passenger yields up 6.1 per cent * Cash balances in excess of £1 billion

British Airways today announced a pre-tax profit of £5 million (2000: £200m) for the three months ended September 30, 2001.

The three-month pre-tax figures took the result for the half-year to £45 million (2000: £150 million).

Yields in the second quarter were up 6.1 per cent, an increase for the eighth successive quarter.

Operating profit for the quarter was £72 million (2000: £264 million). The figure for the six months was £122 million (2000: £361 million).

Group turnover for the second quarter was £2,251 million (2000: £2,552 million) down 11.8 per cent, on a flying programme reduced by 12.6 per cent, measured in available seat kilometres (ASKs). The downturn in the US economy, the impact of foot and mouth and the events of September 11 in the United States have all contributed to a reduction in traffic volumes, measured in revenue passenger kilometres (RPKs), of 16.5 per cent. Seat factor was down 3.5 points to 73.9 per cent.

Excluding the impact of adverse exchange rates and fuel prices, unit costs increased by only one per cent.

As previously announced, there will be no interim dividend.

Rod Eddington, British Airways’ Chief Executive, said: “Even before the US terrorist attacks, market conditions were tough with the slowdown in the US economy affecting our business, but we have a sound strategy in place to counter its effects.

“The impact on our interim and second quarter results should come as no surprise. We remain committed to our strategy of maximising our share of profitable business and reducing less profitable capacity, as well as removing further costs.

“As a result of September 11, we have moved swiftly to conserve cash, ground aircraft, reduce capacity and reduce manpower and other costs. We have also taken prudent steps to increase liquidity throughout this period of uncertainty which may well extend to the next financial year.”

Lord Marshall, the Chairman, said: “The outlook for the second half is difficult to predict, although we anticipate a significant operating loss for the year. Despite the current uncertainty, our strategy is sound and we will continue to implement it sensibly as we go forward. We are ready to take advantage of consolidation opportunities as they arise and are confident we will be well placed in the restructured airline industry as it emerges, when the upturn in global demand arises.”