Flexible preferences

Yes, whilst squeeling 'not fair, not fair' all the way to Necker Island

gorps1

BA will have made a claim under its own and, presumably, the contractor's insurance. Consequently, the Euro 65m provision should relate to uninsured costs, meaning the actual costs of the IT meltdown would have been significantly higher.

Calchas

Who provides insurance for such an open-ended problem? How much are they charging? Will the premiums rise sharply now?

JAXBA

Quote:

Originally Posted by YacozA

Reading this, essentially; all their cost-cutting has failed.
Save for fuel savings and FX, their base costs have increased.

BA won't see it as a failure but as a 'well, if we hadn't cut the costs that we did, that would be even worse - what else can we cut now?'

HIDDY

It now looks BA are getting ever closer to having a solid foundation which augurs well for their future so I expect them to slow down on the cost cutting and start diverting more resources into making the premium products even better than they are....long haul Y might still need some tweaking though.
It's a shame people had to lose jobs along the way but let's look on the bright side....many more have been safeguarded.

nallison

It would be nice to have an informed, fact base discussion about things like this, instead of the obvious candidates retreating to name calling and grabbing at the flimisest of evidence to prove that they are 'right.'

As many here have tried to point out, time and time again, there will be no way of knowing what the impact of BAs cost and service cutting strategy will be for probably at least another year. I wish people could be patient with the 'I told you so', and we could have an actual discussion on what some of the numbers may mean.

If you come on gloating that one quarterly set of figures vindicates BAs entire business strategy, well, you have a lot to learn about business and it's probably not worth having a debate.

This is a complex matter that will take years to play out. Do remember just making profits is no proof the strategy is the best one, especially in a fairly bullish market which it appears to be considered right now. Is their strategy maximising the long term value of the investment, thats the question? A lot of indicators suggest not. But I may be wrong. we'll have to wait and see.

Worth noting that Air France-KLM released their figures today and from what I can tell from a quick glance out-performed IAG in passenger growth, revenue growth, and unit-revenue growth. Some food for thought.

nallison

Ahh, having some read through the small print, I see BA were the only airline in the group for whom revenue fell in the period, from 7,113, to 6,988m.

Revenue growth came in all three other airlines. Interesting. Seems BA is performing below its peers at the present time, any thoughts on why?

BApilotinsider

How did it perform amongst its IAG peers in profit?

Too many on here I think would be happy to see BA failing. I don't agree with many of the strategies at the moment but the results are generally very good in comparison to the market.

Shame, as a few tweaks and BA could be far more profitable still...

nallison

BA profits fell after exceptional items. Other airlines all saw profits increase/losses fall. Almost all profit increase seems to have come from heavily reduced fuel costs.

I'd be rather concerned if I was BA and was seeing revenues fall and this wasn't an industry wide phenomenen.

simons1

I don't think anyone can argue that WW has played his cards right up to now. Acquisitions of Iberia and Aer Lingus, create common platform efficiencies, take advantage of lower oil price and strip out costs. So far so good on that front.

On the other hand over the long term few businesses cut their way to success so the income line will need to be sorted as well. That could of course be lots of people paying low fares and good ancilliary income like Ryanair.

The recent noises on here seem to be that BA realises it needs to start investing again...well they have plenty of cash. That could be investing in the proposition or another acquisition/strip out costs routine.

Share price flat on the day so clearly 'as expected' really.

simons1

I suppose to put it all in context Etihad just declared a loss of $1.87bn, Virgin has progressively sold out to AF/KLM/Delta and there are more rumours about a merger of Cathay and Air China.

WW seems to have steered a reasonable path amidst the turbulent winds.

bafan

Oh please.

He's taken the money and run.

Or, laughed all the way to the bank...

Flexible preferences

That seems like a reasonable viewpoint.

Ldnn1

Well, since we're delving into the detail, it would be remiss not to mention that BA's operating profits were significantly up before exceptional items - €741m in 2017 vs €631 in 2016.

The post-exceptional figures include a €51m gain in 2016 from US medical benefit changes, vs. a €77m loss in 2017 from employee 'transformation' i.e. redundancy programmes.

For info, BA's traffic stats as follows:

Month of June, 2017 vs 2016:
RPK: 12,854 vs 12,735 - up 0.9%
ASK: 15,384 15,164 - up 1.5%

6 months to June, 2017 vs 2016:
RPK: 71,210 69,894 - up 1.9%
ASK: 88,705 87,603 - up 1.3%

Therefore load factor slightly down in month of June but up overall in the 6 month period.

Purim

Looks to me like the carrier imposed surcharge / fuel surcharges is increasingly significant to BA.

There is a TV commercial out here for some car company, and one the scenes is at some crappy (contrasting) dealer where the customer identifies a bunch of shoddy fees and exclaims "dealer document fee $....!!!!!) which for some reason always makes me think of BA.