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BRITISH AIRWAYS ANNOUNCES FIRST QUARTER NET PROFIT OF $80.5 MILLION; PROGRESS MADE IN HOLDING DOWN COSTS

 NEW YORK, Aug. 10 /PRNewswire/ -- A fiscal first quarter net profit of 54 million pounds sterling ($80.5 million), down 22.9 percent from 70 million pounds one year ago, was announced today by British Airways.
 Group revenue for the period, April 1 through June 30, rose 9.1 percent to 1.52 billion pounds ($2.26 billion) from 1.39 billion pounds for the same quarter last year. The operating surplus was 108 million pounds ($161 million), up from 96 million pounds.
 Earnings per American Depository Share (ADS), on a fully diluted basis, were 63 pence, ($.94) compared to 81 pence for the same period last year.
 Chairman Sir Colin Marshall said the results continued to reflect the difficult trading conditions associated with slow worldwide economic recovery and excess capacity in the industry resulting in intense competition and marginally less premium traffic flying. The results were also affected by a one-day strike in the United Kingdom on June 4th.
 "British Airways continues to make satisfactory progress in its profit improvement program, and expects to hold unit costs in the second quarter at levels similar to last year despite the weakness in sterling," Sir Colin added.
 The net profit, equivalent to earnings of 6.9 pence per UK share, against 9.2 pence per UK share for the comparable three months last year, was adjusted to take into account the effect of the company's share offering this spring, which raised 442 million pounds of new equity in the form of almost 185.5 million new ordinary (UK) shares.
 Net payable interest rose to 42 million pounds ($63 million) from 8 million pounds one year ago. This reflects the substantial outlay on fleet and other tangible assets, and investments in alliance partners, which arose mostly in the nine months ending March, 1993, partly offset by lower interest rates.
 The total refinancing requirement in the period amounted to 113 million pounds ($168 million) against 93 million pounds one year ago. The main elements in this change were additional investment in associated undertakings (mainly the participation in USAir's capital issue); the payment of the second interim dividend in respect of 1992- 93; and working capital movements.
 Net borrowings fell by 312 million pounds ($465 million) from March 31, 1993, to 2.14 billion pounds ($3.19 billion). Capital and reserves rose to 2 billion pounds ($3 billion), against 1.5 billion pounds ($2.3 billion) at the year end, giving a net debt:total capital ratio of 52 percent, a 10 point reduction since the fiscal year end.
 While the company has benefited from its profit improvement program, the weakness in the value of sterling meant that unit costs rose by 0.7 percent.
 Fuel and oil, landing fees and en route charges showed large increases -- up by 26.8 percent and 19.8 percent respectively -- reflecting the weaker pound and increased activity.
 During the three months between April and June, 1993, the airline carried 7.8 million passengers, with traffic up 6.6 percent in terms of revenue ton kilometers. With capacity increased by 9 percent, however, passenger load factor on scheduled services fell by 2.6 points, to 69 percent. Cargo carryings rose 6 percent, with 141,000 tons loaded.
 While yields suffered from marginally less premium passengers flying and intense competition caused by excess capacity in the various world markets, the favorable impact of exchange rates on sales overseas meant that the airline received an overall 2.3 percent more for each passenger kilometer flown, at 6.17 pence.
 Looking ahead, Sir Colin stated: "British Airways remains well positioned to take advantage of improved prospects for 1993 and 1994."
 NOTE: American dollar equivalent amounts are translated at the exchange rate at June 30, 1993, of 1 pound sterling to $1.49. One American Depository Share equals 10 UK ordinary shares.
 -0- 8/10/93
 /CONTACT: Sandy Gardiner, public relations, 718-397-4725, or John Lampl, 718-397-4729 or Mark Dunkerley, investor relations, 202-331-9068, all of British Airways/
 (BAB)


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

TM -- NY005 -- 0969 08/10/93 02:30 EDT
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Publication:PR Newswire
Date:Aug 10, 1993
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