BA Boss Misses Out on Bonus Despite Record Profits
Posted on: Saturday, 17 May 2008, 00:00 CDT
THE troubled opening of Heathrow's Terminal 5 cost BA boss Willie Walsh his annual bonus today, despite the airline posting record profits.
The chief executive said he felt any award would have been "inappropriate" given the problem-hit move to the new building in March which left flights cancelled, thousands of passengers separated from their bags and dealt a huge blow to the airline's reputation.
Mr Walsh was speaking after unveiling record pre-tax profits of Pounds 883 million for the year to March 31, up 45 per cent on the previous year.
The performance has triggered a Pounds 35 million bonus pool for BA's other 42,000 staff, as well as the company's first dividend payment for seven years.
Under his remuneration package, Mr Walsh is entitled to a maximum bonus of 100 per cent of salary depending on a series of criteria. During the year to March 2007 he was paid a salary of Pounds 625,000.
He said there had been no pressure "whatsoever" from other board members and big investors for him to forgo his bonus payment.
The rise in profits came despite a year of soaring oil costs which saw the airline's fuel bill top Pounds 2 billion.
BA said its fuel bill could be as high as Pounds 3 billion this year - more than a quarter of the carrier's full-year costs.
The airline, which uses approximately six million tonnes of jet fuel a year, also revealed it takes a Pounds 16 million profit hit for every one dollar rise in oil prices.
Citing fuel prices and costs from the Terminal 5 delays, BA said the three months to June 30 will be "particularly difficult". The quarter's results will also be impacted by the delays in moving to Terminal 5.
The airline added: "The full year will also be challenging, against an uncertain economic outlook. As a result, we have reduced capital expenditure and are reviewing our capacity, costs and network in the context of the economic pressures and high fuel prices."
Mr Walsh said T5 is "working well" and has seen around two million passengers since it opened. A number of longhaul routes, including the airline's blue riband New York service, will start from the terminal on June 5.
The airline's full-year revenues were up 3.1 per cent to Pounds 8.75 billion. It is forecasting a rise of around 4 per cent in revenues for the existing year.
Shares in BA were up 4 per cent today.
(c) 2008 Yorkshire Post. Provided by ProQuest Information and Learning. All rights Reserved.
Source: Yorkshire Post
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