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British Airways takes off
May 22, 2001: 3:12 a.m. ET

UK airline's operating profit quadruples, business passengers rise
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LONDON (CNN) - British Airways, dethroned as Europe's biggest airline, said operating profit quadrupled as it carried more business passengers.

Operating profit for the year ending March 31 rose to £380 million ($546 million) from £84 million last year. The airline swung back into the black, posting a net profit of £114 million from a loss of £21 million a year ago.

Analysts polled by Reuters had expected full-year operating figures of between £369 million and £379 million.

Unlike other European airlines -- including BA's transatlantic archrival Virgin Atlantic, which continues to add more and bigger planes -- BA is switching to smaller jets with fewer economy-class seats and more high-paying business travellers.

The company has introduced flying beds in business class to woo customers back from other airlines on it's most important route from London to the United States and to Asia.

The figures show "our strategy is delivering results," Chief Executive Rod Eddington said. "Most notably, our new Club World product (flying beds)... continues to push up yields and win market share from competitors."

The company said mainline passenger yields or revenue per passenger -- rose by 7.7 percent on a year-on-year basis.

The company said in the fourth-quarter yield per revenue passenger kilometer improved by 11.5 percent, despite a slowdown in the U.S. economy and Britain's bout of foot-and-mouth disease, which has closed the countryside to tourism.

Lord Marshall, Chairman of BA, said: "In the short term, we are seeing the impact of the UK foot-and-mouth outbreak and positioning ourselves for slower world economic growth."

BA is now Europe's second-largest airline -- measured by passenger numbers carried and market value -- after Deutsche Lufthansa. But the German airline made a net loss in the three months to March 31 of £72 million compared with a loss of £165 million in the year-earlier period.

Eddington told journalists on a conference call that BA was confident of selling its budget airline Go, which analysts have valued at £100 million pounds.

"I'm confident that we'll complete with 3i (venture capital group), but there are a couple of people waiting in the wings," Eddington said. He declined to comment on the likely price. graphic