BA's wings clipped as Irish revenues dip to €60m

LIKE ALL airlines around the world at present, British Airways is having to weather a harsh economic storm. Its Irish business too has not been immune to the pressure of recession.

BA, which is led by Irishman Willie Walsh, told me that it earned €60 million in revenues from the Irish market in 2008 compared with €88 million in the previous year.

When translated into sterling, BA’s reporting currency, the performance was flat, a factor of the euro’s strength against the British pound in the latter part of last year.

“Last year was a good result for us given the economic climate in Ireland,” said Simon Daly, who manages BA’s consumer sales operation in Dublin.

Passenger numbers were down 15 per cent. The airline carried about 204,000 passengers from the Republic last year and about 12,000 from Northern Ireland.

This year will be equally challenging, with the travel industry here reporting a 30 per cent decline in trade as consumers and businesses rein in their spending.

In response to weak demand and the introduction of a €10 Government exit tax, BA recently pulled its services from Dublin airport to Gatwick and London City airports.

It is now focusing on its long-haul services from Heathrow via code sharing arrangements from Ireland with Aer Lingus and, to a lesser extend, British airline BMI.

Cape Town, Hong Kong and San Francisco are its most popular routes with Irish customers.

Daly said forward bookings for 2009 are encouraging given the the recession spending. Premium bookings are up about 25 per cent for the April to September period.

“This is purely down to sale fares,” Daly said. “Our forward passenger bookings are up on last year but revenues are down. We have to offer value and we’ve been price competitive in the last couple of months.”

In March, flights to Sydney were available for €699 in economy; they now cost about €1,100. “We as an industry need to look at ways to get people travelling again,” he said.

It’s just over a year since the opening of Terminal 5 at Heathrow and, in spite of much-publicised delays and baggage losses in the first few weeks, Daly said the decision by BA to bring all its services together from the one building has been beneficial for its Irish passengers flying long-haul from there.

In January, the punctuality of BA’s flights increased by 23 percentage points over the same month of 2008. “It’s working well for us now.”