BRITISH Airways is to pay its first dividend since the 9/11 New York terrorist attacks seven years ago and promised to pay its staff a minimum bonus of £500 each.
The group faces a tough year ahead as fuel costs increase by £1bn, but investors were relieved to see that pre-tax profits for the year to March 31 rose 45 per cent to £883m.
Shares in Europe's third-biggest airline, down 12 per cent in the past f
ortnight, rose four per cent to close the day up 9p at 233p.
The profits growth was driven by cost-cutting and higher business-class seat sales, prompting the first dividend since 2001 and a £35m bonus pay-out for staff.
Chief executive Willie Walsh said he would not accept a bonus for 2007-08 because of the much-publicised problems at London Heathrow airport's new Terminal 5. The opening of T5 descended into chaos amid cancelled flights, delays, and lost luggage.
Mr Walsh said he felt a bonus would have been inappropriate.
BA said it was reviewing its capacity, costs and network against a backdrop of economic pressures and high fuel prices.
It said the first quarter will be particularly difficult and the full year also challenging, but it said the strong 2007 results proved it was up to the challenge.
Mr Walsh said the group is going into this tough period in a strong position. Revenues rose 3.1 per cent to £8.75bn and the group announced a dividend of 5p, the first payment since the 9/11 attacks which almost crippled the airline sector.
BA's shares have more than halved in value in the past 15 months, hit by rising fuel costs, a deteriorating economic outlook and the chaotic opening of Terminal 5.
Mr Walsh said that many airline will struggle to survive with increasing oil prices.
He said the company is still in talks with American Airlines and Continental Airlines to explore possible opportunities to cooperate, but he refused to comment further.
BA had now sorted out problems at Terminal 5.
"Despite the difficulties of the opening of Terminal 5 in the first few days, it is now working well and some two million passengers have gone through it," Mr Walsh said.
BA said that based on the current oil price of 120 dollars a barrel its fuel bill for this year will increase by around £1bn to over £3bn.
Under his remuneration package, Mr Walsh is entitled to a bonus of up to 100 per cent of salary. During the year to March 2007 he was paid a salary of £625,000.
"I felt in the context of the disappointing opening associated with Terminal 5 that it would be inappropriate for me to take a bonus," he said
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