Financial Analysis of British Airways - 4252 Words

4. Analysis 4.1 Revenue From the graph, Overall Revenue Trend in appendix C we can see that during the period 2001 Ââ€" 2006 revenue s have fallen by 8.2%, from  £9,278m to  £8,515m. Revenues fell for 3 consecutive years; at the end of 2004 revenues were  £1,718m or 19% lower than in 2001. The following years saw revenues rise  £955m or 13% above this. Let us now consider these changes in more detail. British Airways earns revenue from 3 published sources: Passenger services, cargo services and ‘other, being mainly fuel surcharges. Revenues fell their sharpest during y/e 31 Mar 2002, by 10.1% or  £938m. The atrocities of the terrorist attacks in New York on September 11 hit the airline hard in the third quarter of trading. In†¦show more content†¦88%, or  £224m of the increase was from this area. Early on in the period a journalist for the Financial Times noted British Airways has become the first European airline to impose a surcharge on it s passenger fares in response to the rapid rise in oil prices (ft.com, 12 May 2004) Increases were seen across all geographical regions of between 3 and 5%. Europe was the one exception to this where revenues fell 2.8%, again due to continued pressure on ticket prices and aggressive competition from ‘no-frills carriers. A second consecutive year of rising revenues was experienced in 2006; an increase of 9.0% or  £702m. Fuel surcharges continued to make up a large proportion - 52.1% or  £366m of the increase. Despite the increased costs of tickets due to these surcharges, demand for air travel continued to strengthen. Passenger revenues contributed 47.9% or  £336m of the increase. A JPMorgan analyst noted in a press interview that fuel price surcharges have not depressed demand for air travel (ft.com, 4 Feb 2006). All sectors experienced increased revenues, in particular long-haul destinations such as the Americas increased by 16.5%, or  £228m. The Middle Far East increased by 15.5% or  £90m mainly as a result of additional flights to Mumbai, Bangalore and Chennai in the Indian and Chinese markets. Passenger numbers dipped again by 83,000, butShow MoreRelatedManagement Accounting Of British Airways1573 Words   |  7 PagesAccounting of British Airways This report is produced to explain how management accounting can help to assist management of British Airways. This report includes how British airways began its operation, the various services it provides, competitors and how management accounting techniques help grow the organisation. This report focuses on background of the British Airways, company analysis, and cost analysis and how management accounting techniques can assist Management of British Airways. 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