Passengers desert BA for cheap rivals
British Airways carried 94,000 fewer passengers in July than in the same month last year.
The airline blamed high oil prices, subsequent ticket price increases, and the worsening economic environment. The drop, during what is traditionally peak-season, came from non-premium ticket sales. Passenger load factor – the measurement of how full flights are – dropped 5.4 per cent to an unseasonably low 75.8 per cent.
Earlier this month, chief executive Willie Walsh announced that first quarter profits were 88 per cent lower, adding that “we are in the worst trading environment that the industry has ever faced”.
BCG Brokers analyst Howard Wheeldon said: “They are not the only airline suffering, at both an economy and premium level. All the indications in their figures last week were that the summer was going to be hard.”
It could be that cash-strapped passengers have turned to low-cost rival Ryanair, which has reported a 19 per cent increase in July traffic and a load factor of 89 per cent.
The BA statement coincided with the launch of the airline’s new advertising campaign which aims to rebuild trust in Heathrow’s Terminal 5. The campaign’s objective is to demonstrate that “T5 is working”. Wheeldon added: “From a reputation point of view, BA has to do everything possible to convince passengers to use T5. They need to concretely prove that they have addressed issues such as lost baggage.”
BA plans to cut its winter capacity by 3.1 per cent compared to last year. It is also in talks with Spanish carrier Iberia regarding an all share merger.
