Profits at beleaguered BA hit £289m

British Airways has announced pre-tax profits of £289 million for the second quarter of 2007, just days after being hit by a record fine.

The April-June figure compares with a pre-tax profit of £191 million for the same period last year.

It follows the £270 million total fine imposed by the Office of Fair Trading and the US Department of Justice for colluding on passenger and cargo flight pricing.

First, the OFT slapped a record £121.5 million fine on BA for colluding with rival airline Virgin Atlantic on fuel surcharges.

Then, the DoJ announced a $300 million (£150 million) fine for the fuel surcharge offence and for what it described as price-fixing on cargo flights.

The DoJ said that passengers who flew on BA flights between the UK and the US in the middle part of the decade "paid more for their tickets as a result of the illegal cartel".

Speaking about the profits announcement, BA chief executive Willie Walsh said: "These are very good results despite operational difficulties at Heathrow."

Operating profit for spring 2007 was £263 million compared with £206 million in spring last year, but revenue was flat.

Passenger revenue fell 1.9 per cent to £1.89 billion, but the overall pre-tax profit of £289 million was well above the figure predicted by analysts.

Mr Walsh said: "Profits are up as a result of the steps we took last year to control costs and strengthen our business."

He added: "Revenue is flat before exchange and reflects the continued impact of security and baggage restrictions on short-haul and premium (first class and business class) transfer traffic, which Heathrow has been struggling to cope with.

"We appreciate how frustrating this has been for our customers and I am pleased the Government has also recognised this and set up a working group to see how quickly the restrictions on hand baggage can be eased.

"In order for the Government to remove the restrictions, (airport operator) BAA must recruit additional personnel and invest in the right equipment so we can get back to offering good customer service.

"In the meantime we have taken all available steps to minimise inconvenience to our customers and have increased manpower levels in the terminals at Heathrow to an all-time high.

"The opening of (Heathrow's) Terminal 5 is now just 236 days away and on September 17 BAA hands over the terminal to us. Trials with staff and 2,000 members of the public on all aspects of the new facility start in November.

"I am delighted that, ahead of our move, we have agreed working practice changes with all our Heathrow customer service and operational staff and a two-year pay deal with all our trade union groups which takes us through to 2009.

"Our operating margin for the quarter is 12 per cent and our target of a 10 per cent operating margin for the year remains."

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