Regional traffic picking up

Bishop ... capacity returns

BA British Airways (BA) has resumed its normal flight schedule from the Gulf due to the steady recovery of traffic in the region, says the airline's commercial manager in Bahrain, Jane Bishop.

"Following the attacks in the US, British Airways suffered a drop in traffic across its network of approximately 30 per cent," said Bishop.

"Traffic between the Middle East and London was also affected, with some routes reflecting the overall 30 per cent decline.

"As a result of this, we cut capacity to and from the region in October 2001.

"This included reductions in frequency to Abu Dhabi, Bahrain, Doha, Dubai and Muscat.

"Traffic has shown a steady recovery and as such we have returned capacity on these routes so we now offer a daily service to Abu Dhabi, Bahrain, Doha and Muscat and a double daily service to Dubai, in addition to the routes not affected including Kuwait, Riyadh, Jeddah."

The airline, which has been operating in the region for the past 70 years, currently operates a total of 103 flights a week between the Middle East to Britain.

Bishop however stressed that traffic had not returned to previous levels and globally, the airline had recorded a 6.9 per cent drop in traffic in January this year compared to January 2001.

She said BA planned to enter into a short-term tactical cooperation agreement with Dutch airline KLM on selected flights to and from the Middle East from March 31.

BA posted a huge £144 million ($204 million) loss in the three months to December 31, compared with a £36 million profit a year ago. Sales slumped 20 per cent to £1.8 billion as passenger numbers dropped by more than third after September 11.

On an operating level, BA said it had made a loss of £187 million, but added it had managed to reduce cost by 8.5 per cent and increase revenue per seat sold - or yield - by 0.3 per cent.

The company has said it will reduce its manpower by a further 5,800, on top of the 7,200 announced in October last year, bringing the total reduction of the airline's workforce to 23 per cent by March 2004 (compared to August 2001).

The job losses were announced following a review of the entire business following the attacks in the US.

"The specific details will be worked through in the coming weeks," said Bishop.

She said BA has announced a series of measures aimed at returning the business to profitability.

The measures, which include a significant restructuring of the short haul business to compete with no-frills carriers and the loss of the additional 5,800 jobs, will realise an annual cost saving of £650 million in the next two years and will set the company on course to achieve a 10 per cent operating margin.

Bishop said the Future Size and Shape review had endorsed the airline's existing fleet and network strategy unveiled in 1999.

Since then, the airline's fleet and network strategy had cut capacity by downsizing and simplifying its fleet and reducing its exposure to unprofitable transfer markets.

"This programme will continue over the next two years to realise an overall capacity reduction of 21 per cent by summer 2003, compared to summer 2001," she said.

Bishop said BA continued to invest in products and services in the air and on the ground.

The airline has developed a series of services specifically for its Arab passengers including international cabin crew on all flights between the Gulf and the UK, halal food, Arabic language audio channels on some aircraft types, and Arabic language newspapers for Club and First class passengers.

On arrival at London Heathrow, Arabic speaking staff from the Middle East Visitors' Service can be arranged to meet and assist Arab passengers only with immigration, customs and onward travel arrangement.

Customers can make use of the new Terraces Lounges in Terminal 4. On arrival First and Club customers and Executive Club members can make use of the Arrivals Lounge.

Bishop said BA, which is a founding member of the oneworld alliance, remained committed to the alliance despite the failure of its application for anti-trust immunity with American Airlines.

She said the airline also believed that consolidation of the European aviation industry was essential and it was committed to playing a leading role although there were no plans to merge with any airline at present.