It was the airline's first operating profit since the second quarter of last year and compared with an operating loss of £51m in the year-earlier period.
Pre-tax loss improved to £50m from £122m and was better than analysts’ forecasts of about £100m.
Chief executive Willie Walsh warned that BA still expects to make record losses this year but said ‘permanent structural change’ will return the carrier to ‘sustained profitability’.
‘These results highlight the impact of permanent changes across the company on our costs. Those changes, combined with capacity reductions and external spending cuts, mean operating costs are down by 10.5%,’ he said.
Passenger revenue for the third quarter fell 13% on capacity down 3.9%, and yields dropped 11.1%, largely as a result of lower year-on-year surcharges and the sales mix within cabin class.
‘Other revenue’ grew by 9.2% driven mainly by new web-based ancillary sales and increased use of Airmiles for hotel and leisure activity bookings.
Fuel costs for the quarter were down 19.2%, while other operating expenses fell 6.4% thanks to the cost-cutting measures.
Premium traffic volumes have declined by 9.7% in the year to date although volumes are stable and yields are starting to improve. Load factor rose 1.3 percentage points to 79.2% for the year to date.
BA expects continued improvement into its fourth quarter - unless cabin crew vote by 22 February to strike.
The airline is also talking to staff, unions and pension trustees about its £3.7bn pension funds’ deficit and changes to future pension benefits.
For the nine months to the end of December, BA made an operating loss of £86m, versus a profit of £89m in the year-earlier period, while pre-tax loss widened to £342m from £70m. Revenue for the nine-month period fell 12.9% to £6.1bn.
About £300m of cost savings were made in the year to December, thanks to management reductions, Terminal 5 changes, reduced supplier costs, improved engineering productivity, pilot pay changes and improved productivity, cabin crew complement changes and reduced overseas costs.
BA also released January traffic figures today (see story below).
Related news from e-tid.com:
European airline traffic Jan10 (05/02/2010)
Union condemns BA’s call for ‘scab’ labour (19/01/2010)
BA faces crew ballot as record loss unveiled (06/11/2009)
BA/AA/Iberia in talks about EC objections (02/10/2009)
BA looks to the future (31/07/2009)
BA to save £22m by scrapping short-haul meals (29/07/2009)
BA to raise £600m as Q1 loss hits £100m (17/07/2009)