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LONDON—British Airways Plc. said first- and
business-class travel tumbled 8.6 percent last month as
the credit crisis and economic slowdown led to job
losses and tighter budgets in the City of London and
Wall Street.
Overall
traffic declined 4.8 percent from a year earlier, the
London-based airline said in a statement. Load factor, a
measure of seat occupancy, fell 4.3 percentage points to
74 percent. Premium traffic had increased 2.2 percent in
August.
“It does
look pretty bad,” said Jonathan Wober, an analyst at
Société Genéralé SA in London. “If they continue to have
traffic figures like this, their revenue forecast must
be under threat.’’ Wober has a “sell’’ recommendation on
the stock.
Chief
executive officer Willie Walsh said on September 24 that
British Airways was bracing for a slump in travel in the
lucrative North Atlantic business market as the global
financial meltdown deepened. Financial institutions
account for 13 of the top 50 business clients at
Europe’s third-largest airline, which forecasts that
revenue will gain 3 percent this year.
British
Airways fell 7.1 percent to 165.40 pence in London,
taking declines this year to 47 percent and valuing the
company at £1.9 billion.
Premium
traffic at the airline had previously held up better
than coach-class travel even amid signs of slowing
growth. Economy traffic declined 4.1 percent in
September, the company said on Friday, less than half
the rate of the premium decline. Ryanair Holdings Plc.,
Europe’s biggest discount airline, said also on Friday
that it attracted 20 percent more passengers after
adding routes.
“Trading
conditions continue to be challenging,” British Airways
said. “Long-haul premium traffic has softened after the
summer and forward bookings are being affected by the
increased anxiety in financial markets and by the
uncertain economic outlook.”
Traffic
to the Middle East also fell 12 percent in September due
to the advent of the Muslim holy month of Ramadan,
company Treasurer George Stinnes told reporters on a
conference call. Last year Ramadan fell between
September and October.
While
revenue forecasts for 2008 “carry some risk,’’ yields,
or average prices, are good, the company said, while the
strengthening of the dollar compared with the pound is
offsetting the decline in passenger numbers. British
Airways still aims to break even for the year at
operating level, it said.
“Any
person that makes a forecast from next year is a very
brave person,” Stinnes said. “Market conditions are
tough, there’s no question about that.” (Bloomberg) |
