British Airways has just unleashed a £127m net loss in the nine-months through Dec. 31, 2008.
It’s already guiding for a £150m operating loss in the full-year (through March 2009) because of further “economic weakness” and the fall in sterling, which impairs its ability to pay for dollar-denominated jet fuel.
Of note in today’s results, however, are its latest stats on yields, or average ticket prices. Raising ticket prices to counter a drop-off in volumes has been a big part of the airline’s strategic response to the recession, and stands in stark contrast to the likes of Ryanair, who are dropping fares aggressively to pick up more customers.
From BA’s results:
Passenger revenue at £6.2 billion was up 6.6 per cent on capacity (measured in ASKs) up 0.2 per cent. Yields were up 9.6 per cent, due to a 4.2 per cent benefit from exchange, price increases of 5 per cent (including a 1.4 per cent benefit from a change in estimation basis for outdated tickets) and a positive mix impact of 0.4 per cent.
That’s a bit of a slip since the first-half, when yields went up by 10 per cent – “as a result of both price increases and the impact of the stronger US dollar” – the airline didn’t break out the price increase and exchange benefits then.
Could this be, then, a sign that the carrier is becoming more flexible on its fares in the face of recession? Or simply that ticket currency benefits are weakening?
Shares are up 4.4 per cent in morning trading, in any case.
Related links:
Flying like it’s 1991 – FT Alphaville
Flying forces – FT Alphaville
British Airways’ nosedive – FT Alphaville