British Airways is hinting at a major turnaround at its loss-making short-haul operations and that they may achieve break even for the 2003-4 financial year.

BA chief executive Rod Eddington told financial analysts in a conference call that they may be pleasantly surprised by the short-haul operations when the full-year results are announced in May. BA's European operations have been loss-making since 1997, when they just scraped into the black.

The carrier breaks down its financial figures by region rather than airports, but BA gave an upbeat assessment of its Gatwick performance during the conference call. Analysts point out that this would be an incredible turnaround in today's industry environment, while noting that the performance of short-haul operations at all airlines has traditionally been uncertain due to the question of profit allocation for connections onto long-haul flights.

BA is also looking to cut a further £300 million ($566 million) off its cost base over the next two years, on top of the estimated £795 million of cuts since 2002. BA has been adding short-haul seat capacity in recent months without increasing aircraft numbers, through a combination of higher utilisation and a shift to more economy seats at the expense of premium.

Source: Airline Business