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Aviation History
1993
1993 - 2020.PDF
BUSINESS 6A trimming bears fruit British Airways has contin ued to buck a depressed airline market, with results for the June quarter which indicate that continued action on costs and yields is bearing fruit. Although pre-tax profits at £63 million were down almost a third on the same quarter of 1992, financial analysts have welcomed evidence that BA is well-positioned to benefit from a recovery, helping the airline's share price to leap ahead. The result came despite the impact of the one-day strike on 4 June and a five-fold jump in interest payments, reflecting the group's outlays on fleet expansion and alliances. Yields were up by 2.3%, as benefits from 1992's currency devaluation offset a "marginal" decline in premium passenger numbers. Overall, traffic grew by 6.6% over the quarter. BA chairman Sir Colin Marshall warns that yields re main under pressure from in dustry overcapacity, although there are signs that BA is suc ceeding in its campaign to stem the decline in premium passen ger numbers. Growth in premium traffic in the second half of June has continued into July, according to BA's latest monthly figures. Marshall says that unit costs rose by less than 1% during the quarter, despite the currency weakness. He adds that costs are expected to be held level in the second quarter. Chris Tarry, aerospace ana lyst at merchant banker Klein- wort Benson, points out that a 5% reduction in labour costs saves up to £80 million a year, while a 1% improvement in yield pushes up profit by as much as £50 million. • Iberia denies massive-loss reports Spanish flag-carrier Iberia has stoutly denied news paper reports that it is on course for a year-end loss of Ptas50 billion ($355 million), following soaring losses in the first half. According to Cinco Dias, a Spanish daily financial newspaper, the country's state-owned airline lost nearly Ptas30 billion in the first six months of this year. The par ent airline ended 1992 with a loss of Ptas34.8 billion, which rose to Ptas43 billion at the group level. The company says that the reports have not come from the airline and that no official figures will be released pub licly for the first half. The financially troubled airline is pressing ahead with its cost-cutting programme. reached ground a wage Around 500 jobs are to be cut from the 26,000 payroll by the end of the year, through early retirement. The airline also agreement with its crews in March on freeze, which is expected to save PtaslO billion this year. Airline analysts fear that any savings will be offset by heavy losses on major routes. Newspaper reports suggest that Iberia is losing Ptas5 billion a year on US services, Ptas3 billion on Tokyo serv ices and Ptas2 billion from Argentinean subsidiary, Aero- lineas Argentinas. Iberia is also planning to invest Ptas68 billion this year — including taking delivery of two Boeing 757s as part of its fleet-renovation plan, which runs until 1996. • INTERNATIONAL ON CD-ROM • Flight International on CD-ROM is the information resource you have been waiting for. Forget about storing hundreds of dusty old back copies of your favourite aerospace business magazine. All the articles you will ever need are now stored full text on CD-ROM. Let this user friendly system lead you to the precise information you need - all at the touch of a single key. Use Flight International on CD-ROM to follow the aerospace market, monitor competitors' activities or simply for general information on the aerospace industry. Flight International on CD- ROM provides the quick, easy and cost effective tool for solving your information requirements. Selection facilities include date, section and key words. The key words will help you identify relevant articles quickly, easily, and without the fuss of full text searches. Flight International on CD-ROM will be available by annual subscription. With initial subscribers receiving six months of backdated Flight International free. For further information contact: Richard Elliott: Tel +44 (0)342 335885 ® REED INFORMATION SERVICES 9 REED BUSINESS PUBLISHING FLIGHT INTERNATIONAL 18 - 24 August, 1993 19
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