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 NEW YORK, Nov. 15 /PRNewswire/ -- British Airways (NYSE: BAB) today announced a net profit for the second quarter ended Sept. 30, 1993, of 146 million pounds sterling ($219 million) which resulted in a 9.9 percent gain for the half year to 200 million pounds ($300 million).
 Sir Colin Marshall, Chairman, said the results mirrored "real progress in improving our product, customer service and cost effectiveness in a highly competitive industry."
 He added: "Although excess capacity and down-trading remain major features of the airline industry, British Airways' results reflect some encouraging signs of economic recovery in several of the markets we serve, including the U.S. and U.K., as well as the benefits of weaker sterling."
 Revenues for the quarter were up 18.8 percent to 1.8 billion pounds ($2.7 billion) and up 14.1 percent for the half year to 3.3 billion pounds ($5 billion).
 Earnings per American Depositary Share (ADS) basic, for the second quarter, were 1.60 pounds ($2.40) and, for the six months, down 3.4 percent from 2.37 pounds to 2.29 pounds ($3.44).
 The directors have declared an interim dividend of 3.18 pence per share, up 8.5 percent on a year ago (adjusted to take account of May's rights issue). This translates into a 33.8 pence dividend per ADS (50 cents), adjusted for withholding. This will be paid Feb. 7, 1994, to ADS shareholders of record on Dec. 10, 1993.
 In the three months to Sept. 30, 8.1 million passengers flew on the airline's scheduled services, 14.4 percent more than a year ago, with revenue passenger miles rising by 12.6 percent.
 In the half-year, 15.4 million passengers were carried, up 12.1 percent on a year ago. Revenue passenger miles increased by 10.6 percent. With a slightly higher rise in capacity -- available seat miles were up by 13.5 percent -- passenger load factor slipped by 1.8 percentage points to 72.8 percent. Cargo traffic rose 9.3 percent.
 The relative weakness of sterling improved yields -- and premium traffic showed some strengthening in the second quarter, especially in September. Scheduled passenger yield in the second quarter rose by 7.2 percent and cargo by 12.6 percent. Without exchange rate benefits, yields would have fallen.
 Operating costs in the six months rose by 12.5 percent on a year ago, to 3 billion pounds ($4.5 billion). The decline in sterling's value meant that unit costs, as measured by net operating expenditure per ATMs, increased by 3.6 percent. At constant rates of exchange, unit costs were down by 5 percent.
 Productivity also improved by 8.5 percent with employee numbers for the half-year up by 1.1 percent against an increase in ATMs of 9.7 percent.
 Reflecting the substantial outlay on aircraft and investments in other airlines, mainly in the second half of the last financial year, the net interest payable more than doubled to 77 million pounds.
 USAir's financial results are not consolidated into British Airways' financial results, other than in the form of dividends received on its investment in USAir convertible preferred stock.
 Trading conditions remain difficult in Europe. Consequently, TAT in France is suffering losses on both its domestic and new international routes and the TAT management is working on a major profit improvement exercise.
 Deutsche BA, as expected, also incurred losses for the period, but expects a gradual improvement in results during the course of the coming year.
 Qantas' recently announced results for 1992/93 placed it as one of the few carriers in the world to have traded profitably in this period at the operating level, although exceptional items meant it reported an overall loss. British Airways had largely anticipated and accounted for these pre-acquisition exceptional items in its own accounts for last year.
 During the six months to Sept. 30, British Airways' borrowing net of cash, short-term loans and deposits fell by 275 million pounds to 2.2 billion pounds. Capital and reserves, including convertible capital bonds, rose to 2.1 billion pounds, helped by the 442 million pounds raised in May through the one-for-four rights issue.
 The net debt: total capital ratio stood at 51 percent, an 11 point improvement since the end of the last financial year, on March 31, 1993.
 Looking ahead, Sir Colin said: "Trading conditions overall this winter will remain difficult as a result of over-capacity in the industry, although the economic environment in the U.S. and U.K., our two major markets, is expected to show further improvement.
 "The group continues to make satisfactory progress in its profit improvement program, through both cost reduction and revenue enhancement. Our share of the results of our global partners is expected to improve, reflecting seasonal variances and the benefit of profit improvement programs."
 NOTES: American dollar equivalent amounts are translated at the exchange rate at Sept. 30, 1993, of $1.50 against the pound sterling.
 The estimated dividend payable to holders of American Depositary Shares is translated at the current rate of exchange of $1.48 against the pound sterling and takes account of the U.K. government withholding tax.
 One American Depositary Share equals 10 U.K. ordinary shares.
 -0- 11/15/93
 /CONTACT: John Lampl of British Airways, 718-397-4729/

CO: British Airways ST: IN: AIR SU: ERN

TW-MP -- NY018 -- 4121 11/15/93 02:30 EST
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Publication:PR Newswire
Date:Nov 15, 1993

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