LONDON – British Airway's cargo revenue slumped more than 18 percent in fiscal 2009/10 from a year ago as the carrier booked its biggest operating loss in more than twenty years.
Europe’s third largest airline made a pre-tax loss of £531 million ($768.8 million) in the 12 months ending March 31, the loss since it was privatized in 1987 and significantly above a $580.6 million loss in the previous year.
BA’s total revenue declined 11 percent to $11.4 billion from $12.9 billion.
Cargo revenue shrunk 18.2 percent to $796 million from $974 million outpacing a 2.2 percent decline in traffic to 760,000 tonnes from 777,000 tonnes as excess capacity squeezed margins.
Yields fell 16.5 percent year on year, driven by lower fuel surcharges and underlying market conditions. Excluding the impact of exchange rate movements, yields decreased by 24.5 percent.
BA said the air freight market turned around in November and cargo revenues increased by 9.2 percent in the fourth quarter to end March compared with a year ago while volume rose 5.8 percent.
“Demand for cargo continued to improve in the fourth quarter. Following the high unanticipated peak in the third quarter, led by demand for additional capacity out of China and south East Asian markets,” said Richard Izzard, financial controller, BA World Cargo.
“These markets continue to maintain a high level of demand for air freight and our decision to maintain our freighter routes enabled us to build upon this recovery,” Izzard said.
“Demand for our premium products has also remained strong with volumes maintained in spite of the ongoing global economic turbulence,” he said.
BA faces 15 days of strike action by flight attendants starting on Monday, which will ground part of its fleet, but this is not expected to have a meaningful impact on the carrier’s cargo operations.