British Airways reports drop in premium passenger traffic for September
04 Oct 2008
Shares in British Airways (BA) tumbled 7 per cent yesterday, their lowest level for more than five years, as the UK flag carrier said its premium traffic fell 8.6 per cent in September. This is one of the steepest year-on-year declines reported by the carrier.
The fall in traffic may reflect increasing turmoil in the financial markets and slowing economies.
BA also forecast that it would only break even for the year at the operating level, as compared to the record operating profit of £875 million last year.
BA said the fall in premium traffic for September was one of the steepest year-on-year declines it has suffered. It also said non-premium traffic volumes fell 4.1 per cent.
The carrier generates the majority of its profits from business class passengers.
It also said forward bookings were being affected by "the increased anxiety in financial markets and by the uncertain economic outlook".
BA said fuel costs were expected to be higher at £3bn, with the decline in the value of the pound against the dollar wiping out much of gains from the recent fall in oil prices. It said the "target continues to be for the business to break even at the operating level".
The carrier has already announced plans to cut flights, raise air fares, and reduce capital spending along with job cuts through attrition.
