Summary of the headline figures

In January 2007, passenger capacity, measured in Available Seat Kilometres, was 1.5 per cent above January 2006. Traffic, measured in Revenue Passenger Kilometres, was lower by 2.8 per cent. This resulted in a passenger load factor down 3 points versus last year, to 69.5 per cent. The decrease in traffic comprised a 3.1 per cent decrease in premium traffic and a 2.7 per cent decrease in non-premium traffic. Cargo, measured in Cargo Tonne Kilometres, decreased by 18.1 per cent. Overall load factor fell by 3.2 points to 64.9 per cent.
This month’s statistics were significantly impacted by the threat of industrial action. Premium volumes suffered the largest reductions as most tickets are flexible and refundable, and customers are easily able to move to other carriers. The ballot result in favour of strike action was announced on January 15 and the strike averted on January 29.


Market conditions
The market continues to show good demand in premium cabins. The weakness in some non-premium segments is also still a feature. The revenue outlook for the fourth quarter has been impacted by the threat of industrial action by the T&G. While the strike was averted, the estimated revenue loss is still some £80 million. Revenue guidance for the full year is now 3.25 – 3.75% growth.

Costs
While cost control remains strong, full year costs excluding fuel are expected to be some £50 million higher than last year. This reflects higher costs in the first quarter. Our full year fuel guidance has been revised down by £40 million reflecting the reduction in fuel prices. The fuel bill will now be accounted for on a continuing operations basis, and is expected to be some £1.95 billion.