LONDON, Oct. 4, 2006 (PRIMEZONE) -- In September 2006, passenger capacity, measured in Available Seat Kilometers, was 2.5 percent above September 2005. Traffic, measured in Revenue Passenger Kilometers, was higher by 1.5 percent. This resulted in a passenger load factor down 0.8 points versus last year, to 78.8 percent. The increase in traffic comprised a 1.5 percent increase in premium traffic and a 1.5 percent increase in non-premium traffic. Cargo, measured in Cargo Ton Kilometers, decreased by 5.2 percent. Overall load factor increased by 0.8 points to 73 percent.
For the July to September quarter, ASKs rose by 3.5 percent, with RPKs rising by 3.6 percent. This resulted in an increase in passenger load factor of 0.1 points, to 79.7 percent. This comprised a 6.5 percent increase in premium traffic and a 3.1 percent increase in non-premium traffic. CTKs fell by 1.1 percent.
Market conditions
Market conditions continue to be good, and most segments of the business are recovering well from the events of August. However, as expected, September transfer traffic volumes, in particular in the premium cabins, were affected by carry on baggage restrictions. Volume in premium shorthaul also continues to be soft for the same reason. The reintroduction of standard carry on bag sizes agreed at the end of the month, and harmonization of rules on liquids planned for the end of October are expected to support the gradual recovery of these segments of the business. As a result of the volume shortfall, total revenue is now expected to grow at 5-6% for the financial year, down from 6-7%.
Costs
After the recent major falls in the fuel price, the cost of fuel is now expected to be some 450 million Pounds higher than last year, down from our previous forecast of 550-600 million Pounds.
Strategic Developments
The airline announced that the actuarial deficit in its New Airways Pension Scheme (NAPS) is set to rise from 928 million Pounds to some 2.1 billion Pounds, despite a doubling of BA's contributions and a recovery of the stock market. The trustees confirmed that annual contributions at the unsustainable level of 497 million Pounds would be needed to fund the scheme unless changes to future benefits proposed earlier this year are introduced. This means the company's contributions would go up from five to 12 times members' contributions.
Negotiations between British Airways and the trustees are now underway to agree on a funding plan including proposed benefit changes. Consultation continues with the trades unions.
British Airways urged the Civil Aviation Authority to cut the profits BAA receives from its asset base to ensure that the airport operator builds cost-effective facilities that generate additional airport capacity. The CAA is currently consulting on the level of user charges at Heathrow, Gatwick and Stansted airports for a five year period from April 2008, in its role as an economic regulator.
During the current charging period between April 2003 and March 2008, BAA receives a 7.75 percent return on it asset base. British Airways said this should be set at around 5.6 percent in the next charging period, a reduction of almost one third.
It was announced that James A Lawrence will be joining the board as a non-executive director with effect from 1 November, 2006. He is currently vice chairman and chief financial officer of General Mills Inc., one of the largest food companies in North America. His range of experience covers strategic consultancy, leading U.S. multi-nationals in consumer products and the U.S. airline industry.
The British Airways logo is available at http://www.primezone.com/newsroom/prs/?pkgid=1862
BRITISH AIRWAYS MONTHLY TRAFFIC AND CAPACITY STATISTICS
Month of September Financial year
April through to Sept.
BRITISH AIRWAYS Change Change
SCHEDULED SERVICES 2006 2005 (%) 2006 2005 (%)
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Passengers carried (000)
UK/Europe 2156 2132 +1.1 12701 12566 +1.1
Americas 639 648 -1.3 4068 3910 +4.0
Asia Pacific 166 173 -4.1 965 938 +2.9
Africa and Middle
East 285 257 +11.0 1704 1466 +16.3
Total 3246 3210 +1.1 19439 18880 +3.0
Revenue passenger km (m)
UK/Europe 2070 2005 +3.2 12128 11797 +2.8
Americas 4316 4354 -0.9 27418 26252 +4.4
Asia Pacific 1701 1776 -4.2 9817 9642 +1.8
Africa and Middle
East 1910 1714 +11.4 11331 9805 +15.6
Total 9997 9850 +1.5 60694 57496 +5.6
Available seat km (m)
UK/Europe 2652 2738 -3.1 16039 16515 -2.9
Americas 5599 5342 +4.8 33824 32193 +5.1
Asia Pacific 2030 2169 -6.4 12344 12611 -2.1
Africa and Middle
East 2403 2122 +13.2 14642 12727 +15.0
Total 12683 12372 +2.5 76849 74047 +3.8
Passenger load factor (%)
UK/Europe 78.0 73.2 +4.8pts 75.6 71.4 +4.2pts
Americas 77.1 81.5 -4.4pts 81.1 81.5 -0.4pts
Asia Pacific 83.8 81.9 +1.9pts 79.5 76.5 +3.0pts
Africa and Middle
East 79.5 80.8 -1.3pts 77.4 77.0 +0.4pts
Total 78.8 79.6 -0.8pts 79.0 77.6 +1.4pts
Revenue ton km (RTK) (m)
Cargo ton km (CTK) 392 414 -5.2 2401 2370 +1.3
Total RTK 1417 1397 +1.4 8507 8105 +5.0
Available ton km (m) 1941 1934 +0.4 11850 11557 +2.5
Overall load
factor (%) 73.0 72.2 +0.8pts 71.8 70.1 +1.7pts
Certain statements included in this statement may be forward-looking and may involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements.
Forward-looking statements include, without limitation, projections relating to results of operations and financial conditions and the company's plans and objectives for future operations, including, without limitation, discussions of the company's business and financing plans, expected future revenues and expenditures and divestments. All forward-looking statements in this report are based upon information known to the company on the date of this report. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
It is not reasonably possible to itemize all of the many factors and specific events that could cause the company's forward-looking statements to be incorrect or that could otherwise have a material adverse effect on the future operations or results of an airline operating in the global economy.