British Airways has reported a healthy quarter-on-quarter pre-tax profit growth where the last quarter of 2005 saw an 8% increase as compared to that of the previous year’s, from £152 million to £164 million. BA attributes this growth to rising ridership and cost-cutting activities on its part.
This growth was not very easy to achieve, with the need to cut costs in face of rising fuel prices over the span of the three months, and increasing pension commitments. BA likewise had to undertake massive marketing campaigns to boost its ridership. The airline also opened up new routes to Asian countries, particularly to India and Shanghai.
Premium carriers like BA are facing intense competition from the no-frills airlines that offer only the barest of necessities at very low prices, company formation experts note. Competition has been healthy from the consumers’ standpoint, though, having forced premium airlines to re-think their business models. Business solutions consultants believe there is still a place for airlines such as BA, in that some sectors—particularly the business and executive classes—still opt for premium and packaged-services. And with some, it’s still the customer service that counts—something low-cost airlines may not be offering at this time.