BA recorded pre-tax profits of £788m in the last nine months of 2007, a 34.9% increase on the equivalent figure for 2006. And that’s despite the soaring cost of fuel during the last three months – with oil scraping $100 a barrel, the cost of keeping its planes in the sky jumped by £72m (in fact, the jump in profits was actually more pronounced during this period, rising 73% from the 2006 figure). CEO Willie Walsh described it as ‘another good set of results despite soaring fuel costs and difficulties in the market.’
One major reason for the jump in profits has been currency fluctuation. Since BA does most of its purchasing in dollars, it's profited from the dollar's slide against this pound, which led to a £101m reduction in costs during the period.
The irony is, these numbers come after a year when BA has seen its reputation take a bit of a battering. Some of it wasn't entirely the airline's fault - the disgraceful state of Heathrow, for example, which is BAA's responsibility - but some of its other problems have been of its own making. There was the price-fixing row, which resulted in a £350m fine (after it was grassed up by Virgin), and then a self-inflicted religious controversy when an employee was banned from wearing a crucifix. More recently, it’s been threatened with strike action by pilots disgruntled about its new OpenSkies subsidiary.
But the dark clouds seem to be clearing for BA. It’s planning to launch a new business-class only service between London City Airport and New York in 2009. This would run twice-daily, with just 32 lucky punters on board for each trip, and BA is hoping the City’s corporate giants will pay through the nose for the privilege.
And it expects the opening of Heathrow Terminal Five – now less than eight weeks away – to improve its punctuality record and hopefully stop it losing quite so many of our bags (this year it was named Europe’s worst airline for losing luggage). Walsh said today that passengers would enjoy ‘a calm and effortless experience’ with a suite of lounges that will be ‘the largest and most luxurious in the world’.
Which sounds about as far from the typical Heathrow experience as you can possibly imagine...