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British Airways suffered a further steep fall in demand from business travellers last month. It is a blow to the carrier as the category generates the lion’s share of the group’s profits. BA’s financial performance has come under heavy pressure from the recession and it has already warned that it is facing two successive years of losses to March 2010.
Willie Walsh, BA chief executive, told airline staff last week the aviation sector was facing “the worst trading conditions” in its history. BA is being particularly hard hit because of its dependence both on the financial sector and on the North Atlantic market. BA’s top 10 corporate customers have reduced their travel budgets and have told the airline that the trend is likely to continue.
The group said on Wednesday that it had been hit by a 17.7 per cent fall year-on-year in premium passenger traffic in April, a performance worsened by the timing of Easter, which fell in April this year and in March last year. The Easter holiday reduces premium volumes but increases leisure traffic. BA said its non-premium traffic rose last month by 5.2 per cent year-on-year. Capacity was 2.4 per cent lower than a year ago.
BA said market conditions were “very challenging” with business travel volumes under pressure and fare levels suffering as airlines discounted prices to try to stimulate traffic. Ryanair, Europe’s leading low cost carrier, showed on Wednesday that discounting was helping to fill its still rapidly growing fleet. It reported a 12 per cent increase year-on-year in passenger numbers in April and said it had filled 82 per cent of its seats, up from 79 per cent a year ago.
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