British Airways Plc, Europe's third-largest airline, said third-quarter profit fell 12 percent after security alerts and weather disruptions deterred passengers and prompted flight cancellations, Bloomberg News reported.
Net income declined to 103 million pounds (US$203 million), or 8.9 pence a share, for the three months ended on December 31, from 117 million pounds, or 10.3 pence, a year earlier, the carrier said yesterday in a statement. The figure was less than the median estimate of 109 million pounds in a Bloomberg survey of eight analysts. Sales rose 0.5 percent to 2.07 billion pounds.
Heightened security measures introduced after a foiled terrorist plot in August slowed air travel through October and November, while three days of fog in December caused the airline to cancel more than 800 flights.
"The problems at Heathrow led to a drift in traffic in general away from BA and into Lufthansa and Air France," said Nicholas van den Brul, an analyst at Exane BNP Paribas with an "underperform" rating on the stock.
Shares of the London-based carrier fell as much as six pence, or 1.1 percent, to 539.5 pence and were down 0.4 percent as of 8:10am in London yesterday. The stock has gained 68 percent over the last 12 months.
"Revenue has been hit by a raft of external factors," said Chief Executive Officer Willie Walsh in the statement. The security alert, fog and breakdown of a luggage system at the airline's base in Heathrow airport added 10 million pounds in costs and lost the airline 30 million pounds worth of sales.
British Airways narrowly averted a flight attendants strike this week. The aborted job action cost 80 million pounds in lost revenue. The company reduced its forecast for full-year revenue growth to between 3.25 percent and 3.75 percent from between 4.5 percent and five percent.
Walsh has pledged to boost profitability by cutting costs and increasing revenue.
(Shanghai Daily February 5, 2007)