British Airways Hit By Slump In US Traffic

2008-5-7

British Airways said on Tuesday a slump in economy class travel from the United States helped cut passenger traffic by a worse-than-expected 7 percent in April.

The airline said weak market conditions from a month ago had persisted, with long-haul economy traffic particularly weak. Its load factor fell 5.1 points to 71.6 percent.

"Weakness in non-premium long-haul traffic has continued -- if anything it's a bit weaker," head of investor relations George Stinnes told reporters.

"It's a reflection of consumer spending -- people feel a bit of a pinch... in general, non-premium traffic from the US is at the weaker end."

BA said the chaotic opening of Heathrow's Terminal 5, which caused the cancellation of hundreds of flights, also had an impact as travelers remained wary of the stuttering operation.

"(The figures) look a bit weaker than expected, although I wonder whether a lot of it is down to Terminal 5 and the noise surrounding its disastrous start," Collins Stewart analyst Andrew Fitchie said.

Airlines and their shareholders have been hit this year with the twin threats of rising fuel costs and an economic downturn led by the United States.

BA's passenger traffic to and from the Americas fell nearly 8 percent in April, while the load factor decline was the worst of any region, at 6.3 percentage points.

Last week, it said it was in talks with US rivals American Airlines and Continental Airlines, which a source briefed on the matter said was about a cost-saving alliance.

Stinnes said the talks -- which have also been attempted in the past -- were "not a response to anything" in particular, and said no conclusions had been reached.

BA will release full-year results on May 16 and Stinnes said there was no change to guidance.

Source: airwise.com
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