British Airways, Europe's second-biggest airline, said today that its annual operating profit rose 33% after cost cuts and a recovery in business travel offset high fuel prices and lower fares.
The airline reaffirmed forecasts for improved revenue growth in the current year but said its fuel costs would rise by £400m sterling, up from £300m tipped previously, due to rising oil prices.
'For the year to March 2006, total revenue is expected to improve by 4-5%, up from 3-4% due to the impact of the latest fuel surcharges,' Chairman Martin Broughton said in a statement.
The carrier said operating profit for the year to end-March 2005 was £540m compared to £405m last year. BA said its pre-tax profits rose to £415m compared to £230m last year. No dividend was declared.
BA cut its external spending by £300m during the year and used technology, including online bookings and self-service check in, to improve efficiency.
However, fuel and oil costs leapt 22% for the year to £1.128 billion. US crude hit a record high of $58.28 in early April. BA and other airlines have been forced to introduce levies on ticket prices to help compensate for the increase.
Chief Executive Rod Eddington has axed 13,000 jobs, simplified the airline's fleet and reduced debt during his tenure at BA. Eddington is stepping down at the end of September and will be replaced by former Aer Lingus boss Willie Walsh.
