LONDON – British Airways Plc on Thursday reported an 11.5% drop in passenger traffic during May as a series of cabin-crew strikes disrupted operations, but the carrier also said market conditions are continuing to show improvement.
The decline, measured in terms of revenue passenger kilometers, reflect a 6.5% drop in premium traffic and a 12.5% decrease in non-premium traffic.
Passenger capacity fell 4.7% compared to the same period a year earlier, said British Airways. The strikes, however, yielded only a 6% capacity reduction.
The airline said the strike continues to cost it about 7 million pounds ($10.2 million) a day. It stressed, however, that in the last strike period set for next week it would increase long-haul operations to about 80% of its normal schedule.
Earlier this week, BA said it would operate a full schedule to South Africa, where the soccer World Cup starts next week.
The cargo operations, which require no cabin crew, continued to recover. Traffic rose 7.1%.
Shares of British Airways gained 2.2% in afternoon trading on the London Stock Exchange.
Overall, BA said market conditions are improving.
Airlines around the world have reduced capacity in the last two years to cope with the collapse in demand for travel, an offshoot of the global economic downturn. Many carriers have cancelled or delayed taking delivery of new aircraft to try and protect margins.
The outlook started to brighten at the start of the year, but European airlines then took a hit as a result of plumes of ash from a volcanic eruption in Iceland that closed most of the region’s airspace for nearly a week during April. They lost millions in revenue and had to pay stranded passengers’ expenses.
But there has been no respite for British Airways, hit by cabin-crew strikes that started a month after the volcanic ash crisis ended.
The labor dispute has been going on for more than a year now, focused on changes to work and pay conditions that would bring the airline annual savings of £60 million.
These cuts are crucial, BA argues, if it wants a chance to return to profitability. Earlier this month the airline reported its second straight record annual loss. Read more about BA’s annual loss.
The latest talks between the airline and Unite, the union representing cabin crew, have faltered because of management’s refusal to reinstate the travel perks of crew that went on strike back in March.
Unite has repeatedly accused management, and Chief Executive Willie Walsh in particular, of bullying its members.
Other European airlines including Deutsche Lufthansa and Air France-KLM have faced their own industrial actions over the past two years as they worked to reduce costs. But BA has been the most affected by far.
Low-cost rival Ryanair Holdings Plc, meanwhile, continues to reap the benefits of disruptions on British Airways’ short-haul flights.
The Irish carrier on Thursday said it carried 6.44 million passengers in May, up 17% on the same period a year earlier. It also managed to report a profit last year and on Tuesday declared a special dividend for the first time since it went public more than a decade ago, with investors bidding its shares higher.