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British Airways profits soar 45% | British Airways profits soar 45% |
(about 2 hours later) | |
British Airways has reported a 45% rise in annual profits but warned that economic uncertainty and sky-high fuel costs pose challenges. | British Airways has reported a 45% rise in annual profits but warned that economic uncertainty and sky-high fuel costs pose challenges. |
BA made a profit of £883m in the year to 31 March, which BA boss Willie Walsh called an "outstanding" result. | BA made a profit of £883m in the year to 31 March, which BA boss Willie Walsh called an "outstanding" result. |
Mr Walsh said he would not be taking an annual bonus because of the problems at the opening of Heathrow's Terminal 5. | Mr Walsh said he would not be taking an annual bonus because of the problems at the opening of Heathrow's Terminal 5. |
The airline warned that the problems with the move to Terminal 5 would hurt its earnings this year. | The airline warned that the problems with the move to Terminal 5 would hurt its earnings this year. |
Nevertheless, its shares rose more than 3% in early trading. | Nevertheless, its shares rose more than 3% in early trading. |
'Volatile market' | 'Volatile market' |
BA boss Willie Walsh explains why he will not be taking his bonus | BA boss Willie Walsh explains why he will not be taking his bonus |
BA said the first quarter of the current financial year would be particularly difficult, with crude oil prices at $115 a barrel, almost double the $58 a barrel seen a year ago. | |
The airline's bill for the six million tonnes of jet fuel it uses in an average year was £124m higher than the previous year, despite significant hedging and a weaker dollar. | The airline's bill for the six million tonnes of jet fuel it uses in an average year was £124m higher than the previous year, despite significant hedging and a weaker dollar. |
However, total operating costs were down 0.7% as a result of lower staff costs. | However, total operating costs were down 0.7% as a result of lower staff costs. |
"We operate in a volatile market and this year has been no different," Mr Walsh said. | "We operate in a volatile market and this year has been no different," Mr Walsh said. |
"We have continued to work hard on our costs savings to deliver these strong results." | "We have continued to work hard on our costs savings to deliver these strong results." |
BA said that shareholders would receive their first dividend since 2001 and added that staff would share a £35m bonus. | BA said that shareholders would receive their first dividend since 2001 and added that staff would share a £35m bonus. |
However, Mr Walsh said he had turned down his annual bonus - which could have been worth up to £700,000 - after taking responsibility for the problems at Terminal 5. | However, Mr Walsh said he had turned down his annual bonus - which could have been worth up to £700,000 - after taking responsibility for the problems at Terminal 5. |
The harsh media glare will remain on Mr Walsh ahead of what is bound to be a difficult summer Walsh feels the heatSee BA's share price | The harsh media glare will remain on Mr Walsh ahead of what is bound to be a difficult summer Walsh feels the heatSee BA's share price |
"I thought it would be inappropriate that I be paid a bonus," he told BBC News, adding that his decision had not been affected by concerns about how the media would react should he have done so. | "I thought it would be inappropriate that I be paid a bonus," he told BBC News, adding that his decision had not been affected by concerns about how the media would react should he have done so. |
"I didn't do it for press reasons. I have made it very clear that I was bitterly disappointed about the way we performed at the opening of Terminal 5." | "I didn't do it for press reasons. I have made it very clear that I was bitterly disappointed about the way we performed at the opening of Terminal 5." |
The airline forecast that revenue would rise by about 4% in the current financial year but Mr Walsh said the upcoming period would be "very challenging". | The airline forecast that revenue would rise by about 4% in the current financial year but Mr Walsh said the upcoming period would be "very challenging". |
He also admitted that fares may have to rise to offset the soaring cost of fuel. | He also admitted that fares may have to rise to offset the soaring cost of fuel. |
Tough year | Tough year |
British Airways has been beset by problems this year. | British Airways has been beset by problems this year. |
HAVE YOUR SAYI'm not surprised that BA have made so much profit with the prices they chargeMaggie Jones, CheltenhamSend us your comments | HAVE YOUR SAYI'm not surprised that BA have made so much profit with the prices they chargeMaggie Jones, CheltenhamSend us your comments |
In addition to high fuel prices, its pilots have threatened to strike over the launch of a new subsidiary and the opening of Terminal 5 was regarded as a disaster. | In addition to high fuel prices, its pilots have threatened to strike over the launch of a new subsidiary and the opening of Terminal 5 was regarded as a disaster. |
Staff at the new terminal were not able to get into work, thousands of bags were mislaid and flights were cancelled. | Staff at the new terminal were not able to get into work, thousands of bags were mislaid and flights were cancelled. |
In early April, the airline said that the chaos surrounding the opening of Terminal 5 had so far cost about £16m. | In early April, the airline said that the chaos surrounding the opening of Terminal 5 had so far cost about £16m. |
However, because the £4.3bn building opened just days before the end of the past financial year, the bulk of the financial impact from the fiasco will be incurred this year. | However, because the £4.3bn building opened just days before the end of the past financial year, the bulk of the financial impact from the fiasco will be incurred this year. |