British Airways swung to its first profit in two years in first half of its fiscal year, helped by a 39.4 percent gain in cargo revenue that was driven by a strong upturn in freight pricing.
BA’s cargo revenue reached $559.7 million in the six months ending Sept. 30. Cargo traffic grew only 2.4 percent over the same period a year ago, but cargo yield soared 36.1 percent on stronger pricing and a changing product mix, the airline said.
Europe’s third-largest combination passenger-cargo carrier reported a $252.8 million profit before taxes in the first half of the year compared to a $467.2 million loss a year ago. Overall revenue increased 8.4 percent to $7.1 billion.
The strong financial report comes as British Airways is preparing to merge with Spanish flag carrier Iberia, and as other airlines around the world are reporting a strong turnaround in demand that is translating into sterling financial results.
BA, which last made a profit in the quarter to end June 2008, booked a $592 million operating profit in the second quarter compared with a $27.2 million loss in the same period in 2009.
The air freight recovery that began in late 2009 “has been sustained and we have been encouraged by the improvement in our revenue whilst holding on to the cost savings we achieved during the downturn,” BA World Cargo Managing Director Steve Gunning said.
“Although there is not the same level of inventory re-stocking as last year, we expect demand to grow during the peak season,” he said. “As demonstrated through our long-haul freighter program where we have increased frequencies out of Hong Kong, we will look for opportunities to grow our business, but only in a rational and economically viable manner.”
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