Encouraging Performance by British Airways World Cargo - First Quarter 2002 Financial Results Announced (05/08/2002)

British Airways World Cargo has announced a better than expected set of figures for the first quarter of the Financial Year 2002-3, with revenue levels of £123.0 million for the period ending 30 June 2002. This is a fall of only 3.7 per cent, in a quarter that has seen a reduction of 8% capacity compared with the same period last year.

With demand in some key markets weak at the beginning of the year against still depressed market conditions, the financial performance is the result of quick action taken by British Airways World Cargo to improve profitability through enhanced capacity management and increased productivity across the network.

The volume of cargo traffic carried across the airline's international network fell by 3.8 per cent to 1,046m Cargo Tonne Kilometers (CTKs) from 1,088m CTKs in the same quarter 2000/2001. (Note 1)

Over the same period the airline saw a planned 8 per cent reduction in cargo capacity, in line with the Future Size and Shape strategy announced last year. These factors combined to deliver a 4 per cent increase in Load Factors, including freighters, to 65 per cent over the quarter. Market share was maintained at 14.5% across the quarter*, despite the reduction in capacity. (Note 2)

British Airways World Cargo has also benefited from the wet-lease agreement on its two dedicated freighters, with a new flexible schedule that has enabled the airline to allocate freighter space on an ad hoc basis in line with the demands of the markets. Improvements in the Far Eastern and Indian markets have also contributed to strong freighter performance in the first quarter.

Gareth Kirkwood, Managing Director, British Airways World Cargo said: "The capacity reductions across our network have led to a decrease in our flown volume. However, in line with our strategy we have managed to maintain market share and improve profitability by aligning capacity with demand more efficiently than ever before. We have been encouraged by performance across the network, especially within the Pacific and Middle Eastern markets.

"The launch of our new Products in July has been very well received by our customers across the world and we expect to benefit from continued improvement in our financial performance in the coming months."

Notes:
1. Please note: British Airways World Cargo is now reporting the key measure of Cargo Tonne Kilometres (CTKs) in line with corporate policy. (1 CTK = 1 Tonne of cargo carried 1 kilometre)
2. Source: AEA Traffic Update.