With the recession and structural market change leading to a sharp decline in our revenues, we have responded quickly by making significant and permanent reductions in our cost base.
The BA chairman, Martin Broughton, said the poor outlook had forced the company to scrap its dividend — which was brought back in for the first time in seven years. Geographically, we saw the steepest decline in traffic on our asian routes, while on the North Atlantic, a major part of our business, traffic held up remarkably well and showed promising signs of improvement towards the end of the year, which bodes well for our recovery.
The airline wants to cut the number of cabin crew staff on its long-haul flights from 15 to 14, with the change coming into effect on 16 November.
We have had to cope with the deepest downturn in the global economy in 60 years. The impact of the recession has been to reduce our revenue by The result is that although still loss making, we have been able to stabilise the financial performance of the Company and have been able to beat most analyst expectations for the business.
BA is dependent on high cost fares and some say it has been slow to respond to changing consumer demand. British Airways is facing a difficult future in an industry ravaged by the recession, and Willie Walsh faces a tough battle to turnaround the situation.
Our cargo yield revenue per CTK averaged Previously, BA had been determined to keep prices up at the expense of passenger volumes, but it admitted today that the strategy is untenable in the face of such a severe fall-off in demand.
Seat load factor — Impact of recession on british airways percentage of seats actually filled — rose by 1. This contributed to the strong seat factors reported all year.
Returning our business to profitability requires permanent structural change in our cost base. BA said it would concentrate on driving up passenger numbers — the same strategy as Ryanair, the low-cost carrier that has so far eluded the worst of the downturn.
The impact of the recession is being compounded by important structural changes to our business. High cost vs low cost So, where did it all go wrong for BA and is the recession wholly to blame?
The BA boss earned the moniker "slasher Walsh" when he turned around Irish carrier Aer Lingus with a brutal cost reduction programme and signalled another budget crackdown over the next six months.
The airline has been forced into special offers that were unthinkable two years ago, such as two-for-one deals on the business class seats that generate the majority of its profits. We have decided not to issue any new guidance for the half year or the full year because of the difficulty in forecasting revenues," said BA.
Current levels of traffic volume and yield [fare revenue] have not improved over the last quarter of last year. The high court failed to award an injunction against BA cost-cutting measures yesterday but the Unite trade union, which is attempting to halt reductions in cabin crew levels, vowed to press ahead with a strike ballot that could bring the airline to a halt from 21 December onwards.
However, the 11th hour deal came too late to prevent thousands of customers from booking elsewhere after BA cancelled flights in advance of looming strikes. Faced with the competition, British Airways seems to be experimenting with cost-cutting and surplus charges, such as not serving food on all flights - those that last less than two-and-half hours after 10am - and charging passengers who want to place a second bag in the hold.
The legal challenge has been delayed until next year, so in the meantime Unite says staff will "unwillingly" work the new schedules but it will still ballot for a strike. The Unite union, which represents the majority of flight crew, is holding a ballot on proposals to cut crew on long-haul flights from 15 to 14 and warned yesterday Impact of recession on british airways it expects a "resounding" yes vote.
Unite has taken its objections to the High Court where it wants the changes blocked. The price that people were prepared to pay has adjusted as a result of the general economic environment," he said.
Walsh said a new pay deal for engineers will go to a ballot soon, adding that he was convinced the workforce understood the need for a pay freeze.
John Strickland, an airline consultant, said the best hope for long-haul carriers such as BA was an end to the economic downturn: In order to balance the schemes BA will have to increase payments into both, something its obliged to do but which it will inevitably find difficult, although the company says it is managing.
Revenue started to recover in the second half of the year, as capacity was better matched to demand and yields started to recover. Shares in the flag carrier fell 6. Around 1, employees have left the airline since April.
The first is the impact of high oil prices which have increased our fuel cost to the point of being our single largest cost and, secondly, changes in shorthaul business travel have had some impact on our revenues. Our cargo business, like our passenger business, experienced a sharp decline in the first half of the year but began to recover quite strongly as the year closed.
It also wants to bring in a two-year pay freeze, saying the changes are essential to its survival. True, the move was not the first sign of trouble at the airline, but it was obvious that the situation was getting increasingly tough.
We anticipated the sharp decline in revenue and adapted our costs accordingly. With no sign of a revival in that profitable traffic, the carrier is frantically adjusting its cost base to cope with the alarming mismatch of operating costs and turnover.
In responding to the extent of the downturn, particularly in the UK, we were quick to take advantage of the stronger euro to offer more seats for sale in european markets than was previously the case for this typically lower yielding traffic.
Since Novemberboth the market and British Airways have seen a return to positive year on year growth, with overall volumes for the year down only 2. This compares very well with some of our main competitors who have reported significant declines in load factors.
So far our recovery has been cost driven, but crucially, we now have a more efficient base from which to achieve higher levels of profitability in the future as economic improvement continues. As a result, our transfer volumes grew in the first half of the year, and then eased off again as the point-to-point business started to recover.British Airways British Airways was formed in from its predecessors merging.
Theses airlines were the former BOAC and BEA. Theses airlines were the former BOAC and BEA. British Airways was known as the ‘flag carrier’ airline for the UK, meaning it was the national airline and owned by the state.
The impact of the recession has been to reduce our revenue by per cent to £7, million. Since Novemberboth the market and British Airways have seen a return to positive year on year growth, with overall volumes for the year down only per cent against capacity, down per cent. Nearly 1, British Airways (BA) employees have volunteered to work for free for up to a month to help the airline cut costs during the recession.
Another 4, workers are taking unpaid leave, while 1, people have volunteered to work part-time, the airline reported yesterday. The firm wrote to.
When flying on British Airways or BA, is it worth paying to upgrade to Premium Economy from Economy seats on long-haul flights?
Economy Vs Premium Economy: Price If the price is your biggest factor when making the decision on which class to fly in, you should probably choose to fly Economy.
After all, the entire Continue reading British. The Effects Of The Recession On British Airways. Print Reference this and the rise of ticket prices a steep decline in demand caused some airlines to go into bankruptcy and had an adverse impact on British Airways.
heavy investment at the time of recession and so on has made British Airways to be the least favourite Airline (Survey from. Nov 12, · British Airways and Air France-KLM are hacking back their loyalty schemes to help them compete against low-cost rivals.
Gulf in class: Why British Airways customers might enjoy a strike by flight.Download