DISCOKID
22nd May 2001, 17:00
From bbc.co.uk
Europe's largest airline British Airways has reported a sharp rise in pre-tax profits for the year from just £5m to £150m.
Full-year operating profits rocketed to £380m pounds from £84m last time.
BA is also making more money from each customer than it has done since it was privatised in 1987.
Analysts said the profit figures show that the strategy by Australian chief executive Rod Eddington of cutting back capacity on unprofitable routes, targeting big spenders and offering flat beds in business class is showing results.
"The star number is that passenger yields [the money made per passenger per mile] rose 11.5% in the fourth quarter, which indicates that their strategy is working," said Williams de Broe analyst Andrew Darke.
Mr Eddington took over at the helm last May, after the former chief Bob Ayling was ousted.
BA also announced plans to cut back capacity by up to a further 9% this year as it positions itself for slower world economic growth.
It is also taking into account the impact of the foot-and-mouth epidemic, which has slashed tourism numbers in the UK.
BA was forced to restructure this year after it was hit by tough competition from rivals - some of them low-cost airlines - and higher fuel prices.
The cost of restructuring added a further pull on its profits, but this should be a short-term effect.
BA has also decided to ditch the existing world images from its aircraft tailfins and replace them with the Chatham Dockyard Union Flag - a waving Union Jack.
Additionally, the airline is selling its low-cost airline Go for an expected £100m and talks with potential buyer, the venture capital group 3i Group, are ongoing.
BA's share price rose 1.8% to 363p by 0745 GMT.
Europe's largest airline British Airways has reported a sharp rise in pre-tax profits for the year from just £5m to £150m.
Full-year operating profits rocketed to £380m pounds from £84m last time.
BA is also making more money from each customer than it has done since it was privatised in 1987.
Analysts said the profit figures show that the strategy by Australian chief executive Rod Eddington of cutting back capacity on unprofitable routes, targeting big spenders and offering flat beds in business class is showing results.
"The star number is that passenger yields [the money made per passenger per mile] rose 11.5% in the fourth quarter, which indicates that their strategy is working," said Williams de Broe analyst Andrew Darke.
Mr Eddington took over at the helm last May, after the former chief Bob Ayling was ousted.
BA also announced plans to cut back capacity by up to a further 9% this year as it positions itself for slower world economic growth.
It is also taking into account the impact of the foot-and-mouth epidemic, which has slashed tourism numbers in the UK.
BA was forced to restructure this year after it was hit by tough competition from rivals - some of them low-cost airlines - and higher fuel prices.
The cost of restructuring added a further pull on its profits, but this should be a short-term effect.
BA has also decided to ditch the existing world images from its aircraft tailfins and replace them with the Chatham Dockyard Union Flag - a waving Union Jack.
Additionally, the airline is selling its low-cost airline Go for an expected £100m and talks with potential buyer, the venture capital group 3i Group, are ongoing.
BA's share price rose 1.8% to 363p by 0745 GMT.