British carrier's Q1 cargo capacity increases 14.6%

British Airways World Cargo has reported a volume figure of 1,237 million cargo tonnes kilometres (CTKs) for the first quarter of the financial year beginning April 2008.

The UK carrier said the figure represented an increase of 4.1 per cent compared with the same period last year. Cargo capacity fell by three per cent.

Commercial revenue – flown revenue plus fuel surcharges – for this year's April-June quarter stood at $350 million (Dh1.3bn), an increase of 22 per cent against the same period last year. After the impact of exchange rate movements was removed, commercial revenue was up 19 per cent.

The carrier said the latest quarter had also seen a 51.2 per cent increase in BA's fuel bill compared with last year. Overall yield – commercial revenue per CTK – increased by 17.3 per cent. Excluding exchange rate effects, yield increased by 14.6 per cent.

"Generating a four per cent growth in volume in spite of difficult market conditions is a pleasing achievement for the business," said Sean Doyle, BA World Cargo's financial controller.

"Volume growth aside, the increase in revenue also reflects significantly higher levels of fuel surcharge revenues which only partially offset the impact of unprecedented oil prices on BA's operating profits," he said.

Managing Director Steve Gunning said: "These are an encouraging set of results. However, with both the price of fuel continuing to be high and consumer demand on the high street uncertain, there are difficult times ahead for carriers."

BA World Cargo last week increased its fuel surcharge for the second time in two months owing to escalating oil prices. The surcharge will be 84 pence from July 17, up from the amended charge of 75 pence which came into effect on June 13.

The carrier said the increase was required as the fuel index was above the level 26 threshold for two consecutive weeks.

BA World Cargo has responded to news that European rival Air France-KLM Cargo was planning to introduce a different type of fuel surcharge system.

Adam Carson, BA World Cargo's senior manager revenue management, said: "We regularly review our fuel surcharge policy in response to the dynamic nature of fuel prices and exchange rates. "However, our over-riding approach to the surcharge has been to keep it simple and consistent for our customers. For this reason we have no plans to alter the structure of our current fuel surcharge mechanism."