Full year results (22/05/2009)

British Airways World Cargo has reported commercial revenue (flown revenue plus fuel surcharges) of £673 million for the full year beginning April 2008. This represents an increase of 9.4 per cent against the same period last year. Excluding the impact of exchange rate movements, commercial revenues were up 1.1 per cent.

Volumes of 4,638 million cargo tonne kilometres (CTKs) for the full year represent a decrease of 5.2 per cent versus the previous 12 months. Cargo capacity for the same period was down 5.1 per cent.

Overall yield (commercial revenue per CTK) increased by 15.4 per cent versus last year, driven by higher levels of fuel surcharge. Excluding the impact of exchange rate movements, yield increased by 6.6 per cent.

The fourth quarter in particular saw a 15.5 per cent drop in volumes versus last year - the largest quarterly volume decline on record.

Sean Doyle, financial controller, comments: "Demand for cargo was strong for the first half of the year, underpinned by excellent operational performance through our London Heathrow hub. As the global crisis hit in the second half of the year, demand for general freight declined significantly across key export markets including the Far East and Northern Europe, though our premium volumes were hit less hard. While general freight volumes fell less dramatically out of the US, UK and Indian markets, yields continued to drop due to declining fuel surcharges and industry overcapacity."

Steve Gunning, managing director, comments: "The marked decline that we saw in December has, as expected, continued through to the end of the financial year and while we have seen some stabilisation over the past couple of months there are no signs of an imminent recovery. The major challenge we now face across a number of markets is the imbalance between capacity and demand which has led to unsustainable price pressures. The industry clearly needs to reduce capacity to better align with demand if it is to achieve a sustainable equilibrium."