British Airways makes first profit in two years

Half-year net profit of £107m is the first since 2008 as revenue rises 8.4 per cent to £4.45bn despite strikes and impact of Icelandic volcano on flights.

LONDON  // British Airways  reported a half-year net profit of £107 million pounds (Dh625m) today as cost cuts helped offset the impact of cabin crew strikes and nearly a week of cancelled flights in April because of the eruption by an Icelandic volcano.

The profit for the six months to September 30 was the first since 2008. Last year, BA reported a loss of £217m for the first half.

Revenue rose 8.4 per cent to £4.45 billion; passenger revenue was up 7.9 per cent to £3.88bn while capacity was reduced by 6.2 per cent. Cargo revenue jumped 39 per cent to £350m.

BA said it posted an operating profit of £370m in the second quarter, a turnaround from a loss of £17m a year earlier, but it did not detail quarterly net earnings.

For the six months, BA's operating profit was £298 million pounds, against a loss last year of £111m.

The airline's chief executive, Willie Walsh, said: "Our concerted efforts to introduce permanent structural change across the airline has led to a reduction in non-fuel costs and a return to profitability.

"Revenue has increased, driven primarily by yield improvements and, while fuel costs have risen, they are in line with our expectations."

BA said it would not pay a dividend for the first half.

Mr Walsh said BA expects to conclude its merger with the Spanish airline Iberia in January, a combination expected to save the partners £350m by the fifth year.