7 NOVEMBER 2001

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British Airways Malta route doing well

Air Malta to increase Manchester service


By Ray Abdilla

British Airways has reported a drop in first-half profits in the wake of the September 11 US terrorist attacks and a loss of revenue caused by the fall in passenger numbers, but its Malta route is doing well.

Pre-tax profits for the six months to September 30 were £45m, down from £150m last year. But the once-a-day route to Malta is actually doing better than before, according to the General Manager of British Airways in Malta, James Stagno Navarra.

He said that the forward booking for this month has gone up by 18 per cent whilst the December forward booking have already gone up to 2 per cent.

And Air Malta is also not unhappy with its operations, considering the general picture of air travel in the aftermath of the 11 September attacks.

"The present scheduled flights to Heathrow, Gatwick, Stanstead, Birmingham, Manchester, Glasgow are not doing badly," spokesman, John Saliba said.

The local airlines is also planning to increase operations to Manchester from a three-times a week flight to a daily one.

"Air Malta has and is operating to and from the UK for many years now and is working prudently in continuing being the number one airline in Malta for the British market," he said

He also said that Air Malta is daily monitoring the situation and will continue to be flexible in its operations. He voiced his confidence that the airline industry would soon be back to normal.

The aviation industry is still struggling in the wake of the terrorist attacks.

Over the past few days, Sabena Airlines, the Belgian national carrier, suspended its flights. And the second quarter for British Airways saw some of the toughest trading as pre-tax profits for the three months ended September 30 dropped £195m to £5m, down from £200m for the same period last year.

Passenger yields - a key measurement of average revenue per passenger kilometre - were up 6.1% for the six months period.

The company's chief executive, Rod Eddington, said market conditions were tough even before the attacks, with the US economic slowdown affecting business and the foot and mouth crisis in Britain putting off travellers.

The company warned it expected to see a significant operating loss for the year to March 31, 2002.

On Monday, BA announced a 25% slump in traffic. Soon after the terrorist attacks, it said it was to cut up to 8,000 jobs and managers have been asked to accept a cut in wages of 5-15%.

But despite the overall fall, the quarterly results easily beat most market expectations and investors began to see some hope of a recovery.

Shares in the airline climbed as the company's results beat the analysts gloomy predictions. Airline analysts had been tipping around £30m-40m in operating profit for the three months to September 30, compared with the £264m from a year earlier.

Mr Eddington said that even before the US terrorists attacks, market conditions were tough with the slowdown in the US economy affecting our business, but we have a sound strategy of maximising our share of profitable business and reducing less profitable capacity, as well as removing further costs.

As a result of 11 September, we have moved swiftly to conserve cash, ground aircraft, reduce capacity and reduce manpower and other costs. We have also taken prudent steps to increase liquidity throughout this period of uncertainty which may well extend to the next financial year."

Lord Marshall, the Chairman, said: "The outlook for the second half is difficult to predict, although we anticipate a significant operating loss for the year. Despite the current uncertainty, our strategy is sound and we will continue to implement it sensibly as we go forward. We are ready to take advantage of consolidation opportunities as they arise and are confident we will be well placed in the restructured airline industry as it emerges, when the upturn in global demand arises."

 



The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
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