Skip to content

Chief Financial Officer’s report

Keith Williams, Chief Financial Officer

In response to lower passenger volumes we reduced the amount of flying during the year, cutting the total amount of capacity (measured by available seat kilometres) by 0.7 per cent.

What a difference a year makes. When we reported record profitability 12 months ago, we said our financial strength had significantly improved over recent years and that we were in a good position to deal with the extremely difficult climate gripping the industry caused by economic slowdown and record fuel prices.

The economic recession that has followed has been severe, far more so than most had predicted. It has hit demand for air travel significantly, particularly premium business. That, coupled with record fuel prices in the early part of the year, has meant that we posted an operating loss of £220 million for the year, down £1,098 million and a pre-tax loss of £401 million, down £1,323 million from the previous year.

Revenue

Revenue for the year was £8,992 million, up 2.7 per cent over the previous year supported significantly by currency gains. As demand in the UK weakened during the year, and with it the strength of sterling, we compensated by encouraging sales overseas where exchange effects benefited our revenue.

Overall, our passenger revenue was £7,836 million, up 3.1 per cent over the previous year, despite the increasing weakness in our premium cabins. The amount of premium traffic (measured in revenue passenger kilometres flown) first started to see some weakness in August 2008 and steadily declined, in response to economic slowdown, until the end of the year.

Significant pricing actions were required to stimulate non-premium traffic volumes, which were broadly unchanged year on year.

In terms of overall passenger traffic, total passenger numbers fell by 4.3 per cent and total traffic (measured in revenue passenger kilometres flown) was down 3.4 per cent.

In response to lower passenger volumes we reduced the amount of flying during the year, cutting the total amount of capacity (measured by available seat kilometres) by 0.7 per cent.

As a result of the reduced demand, the seat load factor – the percentage of seats actually filled – fell by 2.1 points to 77.0 per cent.

back to top