World Cup, Jubilee breaks batter BA

SHARES in British Airways were among the chief losers in the City after the carrier revealed a sharp slip in passenger numbers last month. Blaming the World Cup, the Jubilee and stock market turbulence, BA posted a 13.1% drop in traffic for June.

That's the worse year-on-year decline since last November and marks a significant setback in BA's recovery from 11 September. Traffic was down 10.2% in May. The market remains 'soft', BA added. But 'new fare structures' - in other words, price-cutting - were expected to benefit its UK and European business.

One stock market trader said the figures were 'shocking'. BA shares fell 6.5%, stripping more than £100m from its market value. They later narrowed the loss to end down 9p at 164 1/2p, an 8-month low.

'An already soft market was further affected in June by air traffic control disruption, falling confidence in financial markets, two public holidays for the Queen's Golden Jubilee and the World Cup keeping many people at home,' BA added.

The dive is even worse in the context of last year's figures. In June 2001, BA reported an 8.9% fall in passenger numbers as the slowing economy and decline in the leisure market began to take hold. That indicates BA is now carrying 20% fewer passengers than two years ago, outstripping the amount of capacity the airline has been taking out of its business.

The airline, which relies heavily on the transatlantic market for profits, said its load factor, which measures the average number of seats filled on its flights, rose 1.3 points to 69% as it slashed capacity by 12.7%.

BA is cutting 13,500 jobs, simplifying its fleet, overhauling its expensive ticket distribution system, reducing seat capacity and scaling back operations at London's Gatwick airport to slash costs to combat the slump in air travel.