The knock on effect from new airport security measures hit the profits of British Airways, which posted a fall in their second-quarter profits as expected on Friday. The tightening of security not only disrupted flights but also caused general panic amongst all travellers .
BA, Europe’s third largest airline also reduced it's overall revenue growth forecast for the year after new restrictions on hand luggage hit passenger traffic, but announced some good news, saying its fuel bill would be lower than expected after oil prices fell.
BA announced that its operating profit from June to the end of September fell by 8 per cent to £240m, a decrease of £261m from last year’s profit.
According to analysts' forecasts the company had been expected to post a profit of around £235m, so the news wasn’t unexpected.
By yesterday morning the airlines shares had also fallen by 1.6 per cent to 457 ½ pence . There was however an increase by 48 per cent in their overall stock over the last 12 months due to declining oil prices.
The result did not include a write down of £106m on BA’s investment into its regional subsidiary BA Connect, which it has sold to airline Flybe.
Company analysts see no reason to panic as they also expect market conditions to improve after the security restrictions were eased recently. However, the airline was under pressure to secure a deal with unions on how to tackle its pension deficit.
Merrill Lynch analysts said in a client note, "We expect a gradual recovery in traffic. In addition, cost performance is encouraging. However, we see a number of uncertainties including pensions, the three-year wage deal, future fleet renewal plans and possible open skies news next year."
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