British Airways (BA) posted a 27 per cent fall in third-quarter operating profit today as fuel forced up costs and revenues grew only slightly.
Operating profit fell to £129 million on revenues of £2.07 billion, up 0.5 per cent from the October to December period a year earlier.
"These are mixed results with costs up 3 per cent reflecting higher fuel costs and revenue up 0.5 per cent," British Airways chief executive Willie Walsh said.
"Fuel remains a significant burden with costs in the quarter up 11.2 per cent," he said. BA expects a fuel bill this year of £1.95 billion, his statement said.
"Revenue has been hit by a raft of external factors. These include the continued impact of the August security measures. Common EU baggage standards on liquids were not agreed until mid-way through the quarter, and more restrictive rules on hand baggage continue to apply in the UK, he said.
"As a result, transfer volumes at Heathrow are still down."
Fog in Britain over a five-day period in December prompted BA to cancel more than 800 flights. Two breakdowns of luggage handling equipment at Heathrow added to complications, forcing BA to cover the cost of forwarding thousands of bags to passengers.
The airline is preparing to move into a new £4.2 billion terminal at the airport in March 2008 and has set a target for cost savings by then.