2nd UPDATE: British Airways Traffic Falls, Load Factor Rises
March 04 2009 - 10:57AM
Dow Jones News
British Airways PLC (BAY.LN) Wednesday said lucrative premium
traffic fell further in February, but, due to capacity cuts,
proportionately it filled more seats.
BA's passenger load factor, which measures how many of the
airline's available seats it filled with paying passengers, last
month rose 0.5 percentage points to 72%.
Traffic measured in revenue passenger kilometers (RPKs) fell
8.3% from a year earlier to 7.7 billion RPKs, with total passenger
numbers down 10.1% to 2.2 million.
In contrast, budget airline Ryanair Holdings PLC (RYA.DB)
Wednesday announced a 7% increase in the number of passengers
carried in February to 4.1 million compared to 3.8 million last
year. It also said its February load factor increased three
percentage points to 78%.
George Stinnes, BA's treasurer and head of investor relations,
told reporters he didn't think that BA was losing market share to
low-cost carriers such as easyJet PLC (EZJ.LN) and Ryanair.
BA's premium traffic dropped 20.2% on the year, with non-premium
traffic off 5.5%. Premium traffic in January fell 13.7%
year-on-year. BA generates a significant amount of its profits from
premium travelers, particularly on transatlantic routes.
Data was distorted because there was an extra day in February in
2008, a leap year, which the company said had a 3.5% negative
impact. In addition, snowfall in southeast England last month
disrupted traffic, which Stinnes said had another 3% negative
effect on capacity.
Routes BA operates to Asia Pacific were hardest hit, down 18.8%,
while U.K./European routes were down 9.4% on an RPK basis. The
Americas region was also hit, down 7.2%.
That trend was confirmed by AMR Corp.'s (AMR) American Airlines,
which said international traffic in February fell 13.2%
year-on-year despite a 6.3% reduction in capacity. Its domestic
traffic decreased 13.7% year-on-year on 12.4% less capacity.
Traffic was down 13.5% and capacity 10.1% in total.
Its passenger numbers fell 13% to 6.2 million and its load
factor shrank 2.9 percentage points to 73.9%.
U.S. airline stock had risen after carriers disclosed capacity
cuts, but gave up those gains after the BA data had been
released.
BA, American and Spanish carrier Iberia Lineas Aereas de Espana
SA (IBLA.MC) currently are seeking antitrust immunity from the U.S.
Justice Department for a three-way joint venture.
Stinnes said despite weak Americas numbers the U.K. carrier
would continue to focus on selling tickets in the U.S. and in
preference to the U.K., so it could benefit from the strength of
the dollar against sterling. He said U.S. exposure was "beneficial"
adding that many economists expected the U.S. economy to recover
from recession first.
"Market conditions remain challenging but broadly in line with
previous expectations," BA said.
Cargo, measured in cargo ton kilometers, fell 20.7%, but Stinnes
added this decline was better than its competitors given that BA's
cargo business was smaller and focused on the high-end value, such
as perishables goods.
At 1548 GMT, BA shares traded up 7.1 pence, or 5.6%, at 133.6
pence. Ryanair traded up EUR0.22, or 7.9%, at EUR3.
KEY EUROPEAN AIRLINE FEBRUARY TRAFFIC:
AIRLINE RPKs Chg On Yr PASSENGER NOS Chg
British Airways 7.71 Bln -8.3% 2.22M -10.1 %
Ryanair n.av n.av 4.13M +7%
EasyJet Due Mar 5
Air Berlin Due Mar
SAS Due Mar
Lufthansa Due Mar
Iberia Due Mar
Aer Lingus Due Mar
Air France-KLM Due Mar
Alitalia Due Mar
Company Web site: www.britishairways.com
www.ryanair.com
-By Kaveri Niththyananthan, Dow Jones Newswires; 4420 7842 9299; kaveri.niththyananthan@dowjones.com