Company Watch - British Airways.

Aug 6, 2007

British Airways Posts Q1 Profit Rise. British Airways posted a 28 percent rise in quarterly operating profit on Friday, but warned a weak dollar and soaring fuel prices would slow full-year revenue growth and raise costs. Earnings before interest and taxes for the three months to end-June rose to GBP263 million pounds (USD$534 million), BA said in a statement to the London Stock Exchange. Aug 3, 2007

British Airways said its operating margin rose to 12 percent versus 9.2 percent in the same period a year earlier. It reiterated a target of 10 percent for the full year. "Profits are up as a result of the steps we took last year to control costs and strengthen our business," said Chief Executive Willie Walsh. Profit before tax rose to GBP289 million from GBP191 million. Aug 3, 2007

British Airways softened its revenue growth guidance by 1 percentage point to around 4 percent, citing the continued weakness of the US dollar. It also said rising fuel costs would take a bite, rising by GBP120 million this year, GBP20 million worse than earlier forecast. Aug 3, 2007

European holiday-makers than ever are arriving without their luggage, with up to 10 air passengers losing their bags on every flight. According to figures compiled by the Association of European Airlines, British Airways was the worst performing of all Europe's major airlines and is forecast to lose a record 1.3 million bags this year. Aug 3, 2007

One in every 35 passengers on British Airways flights lost luggage between April and June and a continued baggage crisis at Heathrow Airport is expected to exacerbate the problem throughout the summer peak. Such is the scale of the problem that travellers were this week advised to avoid checking in bags and take hand luggage instead. Aug 3, 2007

The Association of European Airlines's figures showed that British Airways passengers were the most likely to be delayed. In the three months to June, 44 per cent of British Airways[sup.1] long-haul flights and 36 per cent of its short-haul trips arrived more than 15 minutes late. Aug 3, 2007

British Airways Chief Executive Willie Walsh defended the fuel surcharge increases, which came as crude oil prices surged. "I want to reassure our passengers that they were not overcharged." But Deputy Assistant Attorney General Scott Hammond rejected Walsh's contention, even though it was difficult to know exactly what the prices would have been without the conspiracy. Hammond asked why a company would risk fines and possible jail time for executives to participate for a lengthy period in a conspiracy that had no effect. "I suggest that defies common sense," he told reporters. In February last year US and European officials raided airlines on both sides of the Atlantic as part of the probe into possible price-fixing of freight rates. Aug 2, 2007

More bad news for British Airways as it was named the worst performing of all Europe's major airlines. A report compiled by the Association of European Airlines (AEA) showed that British Airways passengers were more likely to encounter delays than people travelling on any other airline. Aug 2, 2007

British Airways revealed the biggest fine in its history on Wednesday as it reached settlements with US and UK authorities for price fixing that could cost it up to GBP350 million pounds (USD$711 million). Europe's third-largest airline said it had agreed to pay a fine of GBP121.5 million pounds in the UK and expected U. authorities to announce a separate fine later in the day. British Airways said both the UK's Office of Fair Trading (OFT) and the US Department of Justice would continue with criminal investigations into the conduct of individuals involved. Aug 1, 2007

British Airways revealed the biggest fine in its history on Wednesday as it reached settlements with US and UK authorities for price fixing that could cost it up to GBP350 million pounds (USD$711 million). Aug 1, 2007

British Airways said it expected that provision to cover the fines and any impact from a separate, widespread probe of the airline industry regarding cargo fuel surcharges which also involve authorities in Europe, Canada, Australia, South Africa and New Zealand. Analysts said the UK fine was in line with expectations given the provision already taken and noted BA could have fared far worse. The price fixing related to surcharge increases which took place from 2004 until 2006. Fuel surcharges soared from five pounds to 60 pounds per ticket on typical British Airways or Virgin long-haul return flights during the period but BA Chief Executive Willie Walsh defended these rises, which came as crude oil prices surged. Aug 1, 2007

The highly prestigious London to Sydney air route is to gain a third premium economy operator in February 2008 when Qantas joins British Airways and Virgin Atlantic in offering upgraded cabin. The new Qantas layout will pave the way for the introduction of similar accommodation on the Airbus A380 when it is introduced later in the year, Jul 31, 2007

British Airways and Korean Air have agreed to plead guilty and pay separate USD$300 million criminal fines for their roles in conspiracies to fix the prices of passenger and cargo flights, the US Justice Department said on Wednesday. UK authorities said earlier on Wednesday that British Airways agreed to pay a USD$247 million price-fixing fine for discussing fuel surcharges with rival Virgin Atlantic Airways. The fines, the biggest in the company's history, could have been higher if the airline had not admitted wrongdoing, a UK official said. Aug 2, 2007

British Airways and Korean Air plea agreements are the first from a continuing, wide-ranging investigation into the air transport industry by the Justice Department's antitrust division. Both British Airways and Korean Air have agreed to cooperate with the investigation, Justice Department officials told a news conference. The conspiracies were described as among the largest and most far-reaching ever investigated. "In every instance American businesses and consumers ended up paying more because of these crimes," Acting Associate Attorney General William Mercer said. Aug 2, 2007

British Airways is continuing to investigate an incident in which two of its passenger jets collided on the ground. No-one was hurt when a Washington DC-bound Boeing 777 reversed into the path of a Swiss International Airbus A321 which had just arrived at Heathrow Airport from Zurich. But the damage to the aircraft could run to as much as UK[pounds sterling]1 / USD2 million and there has been speculation that cost-cutting by BA led to the accident. It is thought that a wing of the Washington-bound aircraft, which was moving off its stand at Heathrow's Terminal 4 at the weekend, clipped the tail fin of the A321, which had 100 passengers aboard. The A321 is believed to have been shunted about 10ft. Jul 31, 2007

British Airways has admitted collusion with Virgin Atlantic over the price of long haul passenger fuel surcharges (surcharges) and will pay a penalty of [pounds sterling]121.5m ($246) to be imposed by the Office of Fair Trading (OFT). A criminal investigation is ongoing and no conclusions have been reached as to whether proceedings against individuals can or should be brought. Aug 1, 2007

In London, British Airways reversed this trend by first closing its facility at Victoria and subsequently at Paddington, both at a time when UK's BAA Airports and the authorities are trying to persuade travelers, where possible, to use public transport. Jul 31, 2007

Virgin Atlantic Airways blew the whistle on British Airways after individuals at the two carriers discussed proposed changes to fuel surcharges for long flights. Virgin won immunity by taking the matter to the UK's Office of Fair Trading (OFT). The fine, the biggest imposed on BA for any regulatory breach anywhere, would have been higher if the airline had not admitted wrongdoing. Two senior British Airways executives quit last October after being linked to the investigation and in May British Airways set aside GBP350 million as a provision for possible fines. Aug 1, 2007

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