British Airways reported a halving of second-quarter profits today after suffering a wildcat strike, slashing airfares to boost demand and booking a loss on its yen debt position.
Europe's biggest carrier posted pre-tax profits of £105 million sterling ($175 million), beating the market's consensus forecast of £72 million.
It has cut more than 12,000 jobs, simplified its fleet, chopped loss-making shorthaul routes and adopted the online ticketing tactics of no-frills rivals.
The result also topped the forecast range. The company said chairman Mr Colin Marshall would retire in July next year and would be succeeded by Mr Martin Broughton, chairman of British American Tobacco.
Sales fell by 5.8 per cent to £1.98 billion. Chief executive Mr Rod Eddington said BA had extracted £701 million in annualised savings against a target of £650 million by March 2004 and had cut 12,087 jobs.
"However, in the soft revenue environment, we must do more to remove costs," Mr Eddington said in a statement. The airline also said that recent positive economic news from the United States was not yet showing in forward bookings.
Shares in BA, the most aggressive cost-cutter among European full-service airlines, closed higher on Friday as investors warmed to several months of traffic figures suggesting a recovery in demand, though airfare prices remain under pressure.