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BA claims £40m disruption losses

05/09/2006

British Airways (BA) has said it lost £40 million as a result of disruption caused by stringent security measures introduced at UK airports by the government.

The lost revenue dwarfs the £3 million which budget airline Ryanair claims it lost in the first week of the high-level security requirements, enforced following the apparent foiling of a plot to blow several transatlantic flights up in midair.

Today's announcement comes in conjunction with figures for BA's passenger statistics for August, which saw a 5.1 per cent increase when compared with 12 months previously when the company was beset by problems with its catering contractor, Gate Gourmet.

"The airline estimates that the financial impact for the month of August [2006] was around £40 million," BA said in a statement released this afternoon.

"This includes lost revenue and increased costs of hotel accommodation, catering and baggage repatriation," it explained.

"Since the disruption there has been some impact on forward bookings. The overall level of bookings has returned to levels experienced last year, but is still weaker than the trend of the past few months."

BA's passenger load factor, which reflects the amount of tickets sold as a proportion of seats available, fell by 0.1 per cent to 77.8 per cent. But overall passenger numbers increased by 3.4 per cent, including a 1.1 per cent increase in the UK/Europe market.

Unlike Ryanair's decision to sue the government for its lost earnings, BA has concentrated its criticism on airport operator BAA. It remains placid about the long-term impact of August's disruptions, however.

"Visibility is limited as we emerge from the issues surrounding the August security increases, but underlying market conditions continue to be good," BA said.

The airline's share price rose dramatically in the immediate aftermath of its announcement but slipped back before closing up an overall 1.09 per cent in today's trading.

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