Airline Post

British Airways reported a shocking third quarter operating profit of GBP£25 million pounds (USD$39 million) during the last three months of 2009.

BA chief executive Willie Walsh said it is an impact of company’s capacity reduction and cost cuts and according to him it shows the impact of permanent changes across company policy. He also said the British Airways has adapted to the global recession. He further explained the reasons behind the 10.5 percent decrease in their operating costs are external spending cuts and capacity reductions.

On the other hand rival Air France has reported stabilized business, but according to experts its 2010 estimates are quite high. Finnair, the Finnish national carrier, has gone through loss in the last fourth quarter and announced that it is expecting future losses in this quarter also.

For BA the revenues fell down to 12.9% of GBP£6.14 billion. It has faced an operating loss of GBP£86 million for the first time during last year.

According to the International Air Transport Association (IATA) this sector will face many challenges this year including new security issues.

BA reported lower cabin class sales and surcharges which in turn caused 8.8% fall in the third quarter. The airline also reported a decrease in its business class passengers by 2.1 percent and a total of 7% decrease in the month of January. BA has announced its merger agreement with Spain’s Iberia airline.

Whereas other low-cost competitors like Ryanair and easyJet have reported profits in their forecasts and said they are still able to make their market share from BA and Air France-KLM.

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