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BA profits soar

19/05/2006

British Airways (BA) has reported a 21 per cent increase in its annual pre-tax profit.

Europe's third-largest airline said its pre-tax for the year to March 31st 2006 was £620 million, up from £513 million in the previous year.

The company's operating profit for the year also beat market expectations, up from £556 million last year, to £705 million.

In a statement BA said that the improvement in its operating profit was led by higher ticket prices and fuller planes.

The airline said its revenue increased by 9.6 per cent over the year, with passenger yields, excluding fuel surcharge, up 1.3 per cent.

BA also increased the value of its sales from £7.7 billion to £8.52 billion.

The company did however stress that increased operating costs had impacted upon profits, with fuel costs up 44.7 per cent and employee costs up five per cent.

Meanwhile, in a separate statement, BA has revealed that its pension deficit has now reached £2 billion.

The airline said that its main pension scheme, the New Airways Pension Scheme (NAPS), showed a deficit of £2,070 million at March 31st, up £101 million on the previous year.

Commenting, BA's chief financial officer Keith Williams said: "The accounting deficit reflects low long-term interest rates and has gone up despite the company's increased contributions and strong equity markets."


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