Slimline BA's profits take-off

BRITISH Airways chief executive Rod Eddington today indicated the worst is over in the aviation industry as he reported a fourfold leap in profits in the Christmas quarter.

Eddington, who has slashed nearly 13,000 jobs since the 9/11 terrorist atrocities and has ordered the axe on a further 4,000, said: 'We have survived the most testing period in aviation history. These are good results and a significant improvement on last year.'

BA reported pre-tax profits for the three months to the end of December of £125m against £25m in the same period of 2002. This was at the top of City hopes, and the shares led today's FTSE 100 risers, adding 9p to 297p, close to a two-and-a-half-year high.

However, the airline's earnings are still down year-on-year. Pre-tax profits for the first nine months of its fiscal year are £185m, 45% down on £335m during the same period last year.

The results also show Eddington is short of his operating profit margin target of 10%. The last quarter's 7.3% dragged the margin for the year up to 6.5%. That, however, is more than one percentage point worse than in 2002-3.

Chairman Lord Marshall warned: 'Security issues are having some impact on forward bookings. Long-haul premium [business and first class] volumes remain above last year's levels but shorthaul premium demand remains weak.'

Indicating that BA, like top budget airline Ryanair, is feeling the pinch in a cut-throat fares war in the UK and Europe, Marshall added: 'Non premium traffic [economy class] volumes remain very sensitive to yield.'