ALEXANDER CAMPBELL / LONDON
Low-cost carrier Go has revealed impressive interim results, a sharp contrast to the travails of its former parent British Airways. The no-frills carrier reported 2.1 million passengers, up 41%; £128.2 million revenue ($181 million), up 44%; and £16.9 million pre-tax profit, up 51%, for the six months to 30 September compared with the same period last year.
Go was sold by BA in a management buyout in June and is now owned by the venture capital group 3i. Releasing the results on 19 November, chief executive Barbara Cassani confirmed the airline still planned to float in two to three years' time. BA suffered badly in the aftermath of 11 September, with passenger numbers falling and profits almost wiped out. Most flag carriers went the same way, but the UK low-cost airlines like Go, EasyJet and Ryanair have flourished in an increasingly hostile market, taking on routes dropped by the flag carriers - Go recently expanded its London-Belfast service after BA withdrew from the route.
EasyJet's hub airport at Luton also profited from the rise in low-cost airline passenger numbers. TBI, which owns part of Luton, reported its operating profits rising 84% last week. Meanwhile BAA, which operates Heathrow, Gatwick and Stansted, largely used by the heavily troubled mainstream airlines, reported falling passenger numbers and minimal profit increases in its interim results in October.
Unlike other low-cost airlines, Go's yield rose slightly from 5.2p to 5.8p per revenue-passenger km. But, if it follows the pattern of other low-cost carriers, it will run into more competition as it grows, and will be forced to cut fares further, squeezing its margins. The low-cost sector has thrived, partly on the back of fare cutting since the economic slow-down and the war in Afghanistan, with most no- frills airlines reporting rises in passengers, revenues and profits.
Source: Flight International
