BA quarterly profits fall 27 percent

British Airways third-quarter profit fell 27 percent as fuel costs rose and new security requirements cut into revenue. Quarterly operating profit fell to $254 million on revenues rose 0.5 percent to $4.066 billion to a year earlier. Fuel remains a significant burden with costs in the quarter up 11.2 percent which rose airlines cost by 3 percent. The company also downgraded its full-year revenue forecast because of a labor and dispute with cabin crew which wiped out two days of normal business, cost the company about $158 million caused flight cancellations in January. During strike BA cancelled 1,300 flights which accounted to lost about 50,000 out of 77,000 passengers. Revenue also hit by new security measures too, as it imposed after British police thwarted a plot to blow up a U.S.-bound aircraft. The failure of the baggage system at Heathrow Airport Terminal 4, BA’s main London terminal, and severe fog which forced the cancellation of 800 flights during the Christmas period also hurt. The impact of all these external factors in the quarter is estimated loss of $79 million. But for the New Year, the airline is gearing up to move into a new 4.2 billion pound terminal at the airport in March 2008 and has set a target for cost savings by then. BA is also replacing more than 30 of its older Boeing Co. 747 and 767 planes.