BA reports 45% increase in profits

British Airways (BA) has announced a 45% increase in annual profits. In the 12 months to end of March, BA made a profit of £883 million which, according to chief executive Willie Walsh, is an outstanding result.

BA has had a rough time recently after the opening of Terminal 5 at Heathrow Airport.

As a result of the debacle of the new £4.3 billion terminal, Gareth Kirkwood, the director of operations and David Noyes, the director of customer services, were forced to leave BA.

The airline will now pay its first dividend since before the 2001 terrorist attacks. Its good performance means a £35 million bonus for staff. However, Mr Walsh said he had turned down his annual bonus (which is reported to be around £700,000), after admitting responsibility for the problems at Terminal 5.

Commenting on the results, Mr Walsh said this is an outstanding financial result for the company despite rising fuel prices and significant economic slowdown in the last six months.

We have achieved our goal of a 10% operating margin, which I am delighted has triggered the reward scheme for our staff. For our shareholders too, it signals the welcome return of a dividend, added Mr Walsh.

We operate in a volatile market and this year has been no different against the background of a progressively tougher trading environment, he added.

Forecasting how fast revenues will growth this year, the airline said the figure is likely to be around 4% rather than the 4.5% it was previously predicting.

In addition to the £200 million of extra costs including the delays at Terminal 5, the airline warned that economic uncertainty and sky-high fuel costs present challenges.

The dividend will be 5p for the year.

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