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 05 July 2008 14:06 BST

BA profits jump 44.5%

Friday, 16 May 2008 19:50
British Airways profits are up 44.5 per cent

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British Airways has announced its first dividend since 2001 as it revealed a 44.5 per cent pre-tax profit jump for the year to £833 million.

Chief executive Willie Walsh has been under pressure to turn around the fortunes of the airline, which has struggled over the last few years with a price-fixing scandal, plunging share prices and March's Terminal 5 fiasco.

Mr Walsh told Radio 4's Today programme that as a result of the disastrous opening of BA's terminal in Heathrow, he would not be taking his bonus this year.

He said: "I am not getting a bonus. I felt it would be inappropriate in the context of the very disappointing opening of Terminal 5 in March.

"So despite the fact it was a record year in terms of our financial performance, I advised the chairman that I thought it would be inappropriate. I have made it very clear I was very disappointed at the way we had performed."

The airline met its target of a ten per cent operating margin, and said it has paid its staff a £35 million bonus.

Mr Walsh said in a statement: "This is an outstanding financial result for the company despite rising fuel prices and significant economic slowdown in the last six months.

"We have achieved our goal of a ten per cent operating margin which I am delighted has triggered the reward scheme for our staff. For our shareholders too, it signals the welcome return of a dividend - the first since 2001."

He also said that despite the "difficulties" of the opening of Terminal 5 in the first few days, it is now working well and some two million passengers have gone through it, adding many have enjoyed the experience.

The transfer of long-haul flights from Terminal 4 to Terminal 5 begins on June 5th, after being delayed due to the problems.

However, BA did warn that this year will be "challenging" as the high price of fuel may spell trouble ahead for the airline. A new 'per plane' tax due to come in during November 2009 may also impact revenues.End of story


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