March 2008 passenger capacity, measured in Available Seat Kilometres, was 1.6 per cent below March 2007.  Traffic, measured in Revenue Passenger Kilometres, fell by 2.8 per cent.  This resulted in a passenger load factor decrease of 0.9 points versus last year, to 75.4 per cent. 

Traffic comprised a 5.0 per cent decrease in premium traffic and a 2.3 per cent fall in non-premium traffic. Comparisons between March 2007 and 2008 are complicated by the timing of Easter, which fell in April in 2007, and by the de-linking of UK school holidays from the Easter period and into the middle of April. This altered both premium and non-premium travel patterns, an impact which is also likely to be seen in April's statistics.

Cargo, measured in Cargo Tonne Kilometres, rose by 11.5 per cent. 

The figures also reflect the events which surrounded the opening of Terminal 5 on 27 March. The impact was borne by the shorthaul schedule, where there were 300 cancelled flights, equating to 0.2 percentage points of capacity. The financial impact of these events is estimated to be around £16 million, reflecting all costs associated with the disruption and lost revenue opportunities. Although there remains a small number of cancellations for today and tomorrow, the Terminal 5 performance is steadily improving.

Market conditions

Market conditions remain unchanged. Underlying conditions in longhaul premium traffic continue to be strong, while shorthaul premium and longhaul non-premium continue to be weak.

Strategic Developments

The opening of Terminal 5 was affected by operational problems that caused major disruption.  The airline is working hard with BAA to resolve these issues.

British Airways increased its stake in the Spanish airline Iberia to 13.15 per cent. The purchase reflects the strategic importance of Iberia to BA. The airline bought 28,745,767 shares at an average price of €2.34 per share.

At its annual Investor Day British Airways released its market guidance for the financial year 2008/9. Revenue is forecast to increase by 4 - 4.5 per cent to over £9.1 billion, based on capacity measured in available seat kilometers (ASKs) up 2.4 per cent. Fuel costs are expected to be up by some £450 million to £2.5 billion, an increase of 20 per cent

British Airways is launching a dozen new routes from Gatwick to European hotspots this summer. The new routes to Alicante, Faro, Gibraltar, Ibiza, Malaga, Malta, Palma, Paphos, and Tunis replace services previously operated by franchise partner GB Airways following the end of that franchise agreement. There are also new flights to Antalya, Genoa and Poznan.

The Civil Aviation Authority announced that Heathrow's charges over five years from April 1, 2008 will rise by 23.5 per cent above inflation in year one and by 7.5 per cent above inflation each year between 2009 and 2013.  BAA will be allowed a cost of capital of 6.2 per cent. BA said the decision demonstrates conclusively that the airport regulation system has failed, to the detriment of customers.

The first Airbus A380 passenger service flew into Heathrow. British Airways will handle maintenance of the Singapore Airlines A380s at Heathrow. BA flight crew begin preparations for delivery of the airline's own fleet of 12 A380s from April 2012. BA's Captain Jim Harlow is the first UK airline pilot to qualify to fly the A380.