This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/go/rss/int/news/-/news/business-11649792
The article has changed 4 times. There is an RSS feed of changes available.
Version 0 | Version 1 |
---|---|
British Airways in first profit for two years | British Airways in first profit for two years |
(40 minutes later) | |
British Airways (BA) has reported a half-year profit of £158m ($252m), its first in two years, as the company prepares to merge with Iberia of Spain. | |
The stronger-than-expected results come despite the impact of cabin crew strikes and the Icelandic ash cloud. | |
Meanwhile, Iberia has reported a nine-month profit of 53m euros (£46m; $74m). | |
Separately, it has emerged that BA boss Willie Walsh and other executives will receive substantial pay rises after the two airlines merge. | |
Bounce back | |
Analysts had been expecting a profit figure for BA of about £75m - half of what the airline actually made. | |
Revenues were up 8.4% to £4.4bn, thanks to a particularly strong 39% rise in cargo revenues, according to the airlines official release. | |
Costs were cut by 1.5%. The company said that cost control was something that it continued to focus on. | |
Performance was much stronger during the latter half of the six-month reporting period. | |
Pre-tax profits in the three months to September - which was free of strikes and ash - were £322m. | |
This more than offset a loss in the previous quarter, which saw 15 days of strikes as well as the eruption of the Eyjafjallajoekull volcano in Iceland in April. | |
The company also suffered under European air traffic control strikes during the period, though Mr Walsh boasted that despite this, 74% of BA's Heathrow flights and 84% of its Gatwick flights still departed on time. | |
The half-year results mark a complete turnaround from the £292m loss that BA made during the same period in 2009, at the depth of the recession. | |
Pay packet | |
British Airways and Iberia will merge on 21 January. | |
Mr Walsh will become chief executive of the combined company - International Consolidated Airlines Group - and will see his basic pay rise 12% to £825,000 a year. | Mr Walsh will become chief executive of the combined company - International Consolidated Airlines Group - and will see his basic pay rise 12% to £825,000 a year. |
He will also be eligible for performance-related bonuses under the merger deal, that will be capped at twice his basic pay, or £1.65m. | He will also be eligible for performance-related bonuses under the merger deal, that will be capped at twice his basic pay, or £1.65m. |
Mr Walsh's colleague, BA chief financial officer Keith Williams, will see his basic pay rise 43% to £630,000 after his promotion to replace Mr Walsh as BA chief executive within the enlarged company. | Mr Walsh's colleague, BA chief financial officer Keith Williams, will see his basic pay rise 43% to £630,000 after his promotion to replace Mr Walsh as BA chief executive within the enlarged company. |
Mr Williams' bonus will be capped at 1.5 times his basic salary. | |
Air Passenger Duty | |
Mr Walsh used the opportunity of the financial results release to criticise a tax rise on passengers due to kick in next week. | |
"Excessive taxation puts aviation's social and economic benefits at risk," said the company in its press release. | |
Air Passenger Duty will increase by up to 55% on some long-haul flights, the company claimed. | |
"Aviation supports more than 500,000 jobs in the UK and provides the transport links that are vital to the success of UK businesses in a globalised economy." | |
The UK government says the tax increase will better reflect the cost of carbon emissions by the airline industry. | |
"We already meet our carbon costs twice over even before these increases," claimed BA. | |
On Thursday, BA's bitter rival Virgin Atlantic also criticised the tax change, claiming it would make family holidays unaffordable for many. |