Quarter one financial results announced (03/08/2007)

British Airways World Cargo has reported a reduction in commercial revenues (flown revenues plus fuel surcharges) of 11.5 per cent to £146 million for the first quarter, down 7.3 per cent after the effects of exchange rate movements are removed.

Capacity measured in available tonne kilometres (ATKs) decreased by 5.2 percent compared to last year. Volumes fell by 3.6 percent over the same period, to 1,189 million cargo tonne kilometres (CTKs).

Overall yields (revenue per CTK) were down by 3.8 per cent, excluding exchange effects.

Sean Doyle, financial controller comments: "Exchange rate movements and the weakened dollar had a significant impact on the headline revenue figure. Cargo capacity was reduced as we operated three longhaul freighters in the first quarter of this year compared to four last year. The capacity decline also reflects the impact of baggage changes - including the policies imposed by the UK Department for Transport last August - which has led to reduced belly hold space for cargo.

"The decline in yields reflected challenging market conditions, lower levels of fuel surcharges and a change in our destination mix as a result of declining demand for Americas-destined freight. The US export market is performing well for us and we have seen a steady performance from Asia Pacific, the Middle East and South Asia."

Steve Gunning, managing director, adds: "These results show a good recovery from the previous quarter. While reported volumes for the period are down, they have outperformed our capacity reduction, showing that we're filling aircraft more effectively. We are operating in a challenging environment where yield decline is market-driven.

"Our premium business was encouraging with consistently improving volumes, most notably out of the Asia Pacific and Middle East markets. The freighter operation, so vital for many of our customers' cargo, has also performed well, which has been reflected by the recent five-year renewal of the wet lease covering our three Boeing 747-400 freighters.

"Looking ahead, our focus is on growing profitable traffic through our premium offering and delivering a resilient operation for our customers."