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Tue 20 Jan 2009 04:00 AM

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Best of British

The end of 2008 saw British Airways celebrating 40 years since it began operating flights to the UAE’s capital.

The end of 2008 saw British Airways celebrating 40 years since it began operating flights to the UAE's capital. The company's general manager, Robbie Baird, believes that the airline is poised to continue its growth in the region despite the continuing economic downturn.

What do the last 40 years of flying to Abu Dhabi signify for British Airways (BA)?

This Abu Dhabi service milestone highlights our longstanding commitment to this part of the world. BA has been coming here for a very long time - 40 years to Abu Dhabi but 76 years to the Middle East.

The enduring importance of the Middle East is now reflected in the fact that we now fly to the region 56 times a week.

In 1968, we became the first commercial carrier to fly to the then Al Bateen airport, and Abu Dhabi remains a key market for BA to sell to.

I think Abu Dhabi International Airport (ADIA) has grown and continues to grow in its profile as a really important global and strategic aviation hub, but it is very clear that it is rapidly evolving into a business, leisure and tourism destination that is attractive to the UK and the trans-Atlantic market.

The enduring importance of the Middle East to BA is reflected in the fact that we now fly to the region 56 times a week, shortly to go up to 61. I'm absolutely certain that this will not be an end to the growth in the area.

The airline recently began operating all Mid East services out of Heathrow's Terminal 5. How are you settling into your new home?

Today, Terminal 5 is performing well and customers travelling from Abu Dhabi to the UK, Europe and North America, do so through our brand new home at T5.

Our customer service figures show that we are 20% better than we were before, and in terms of the developments that are happening here at ADIA, I feel that it will soon be true that customers will be travelling between the two best airports in the world.

What steps is BA taking to lower its environmental impact?

British Airways was the first airline to introduce a voluntary passenger carbon offsetting programme. The carbon emissions of 4% of bookings on ba.com are currently off-set.This equates to the off-setting of 50,000 tonnes of carbon - or taking over 16,000 mid-sized cars off the road. Our current target for the uptake of our off-setting scheme is 10% and we are working hard to achieve this.

We began a new carbon off-set scheme a year ago, which is more user-friendly, with customers able to buy their offset in one transaction when they book their flights on ba.com.

The upgraded offset uses UN certified emissions reductions to help finance clean energy projects in developing countries. We support a wind farm and hydro-electric plant in China, and a sustainable power plant in Brazil.

BA is fully committed to reducing its impact on the environment and we have set a target to improve the airline's fuel efficiency by 25% by 2025. This is on top of the 28% improvement we have made in our fuel efficiency since 1990.

Has BA been affected by the declining economic conditions over the past year?

It has to be said, times are difficult for all airlines and we face perhaps the harshest trading conditions this industry has ever seen. We have seen the economic slowdown and more than 30 airlines have gone out of business.

The good news for BA is that it is going into this period in a cash rich position and the airline will come out on the other side of this difficult time in good shape. Over the past 35 years we have seen huge changes and massive growth, as well as periodically difficult times, but we have overridden most of them.

Does the drop in fuel costs offset the profit losses you may have if passenger numbers fall?

Some of those lower fuel prices will begin to flow through because they are hedged, and the airline does buy some of its fuel on the stock market, but unfortunately it is not that kind of balance.

When you see your fuel costs rise from US$2 billion to $3 billion, as BA did, that level of increase is just too great. These costs impact everything else, such as the price of food, so non-fuel costs also rise.When the fuel surge happened we had to push prices up, but at the same time, we have reduced some fares as well. Overall our revenue is a touch up year on year.

Our financial year is in March and we expect to deliver a small profit.

We do not talk about the profitability of a route, but as a business we are committed to delivering at least a breakeven result this year. This is deliverable but [in the current financial market], a super human effort.

How does BA intend to achieve these financial results?

The trick to increasing profitability is to grow without adding to your costs, so one of the things we have under constant review is people costs.

With the growth BA is putting into this part of the world, we don't plan to add any further people costs to our organisation.

There are no job cuts [by BA] in this region, but we have had to close the Islamabad route, which was a decision that came out of the political situation. After the Marriott hotel bombings, we felt we should no longer be flying to Islamabad.

How will you remain competitive?

We believe in competition and will fight on quality and price where we feel we have to. We will follow other airlines on pricing structure in some circumstances and have been proactive in trying to improve our sales in areas where we have been softening in demand.

It is inevitable we will want to invest and on the fares front, just a few weeks ago we launched some very good premium fares. We are trying to be innovative in the way we use prices to attract customers.

Can you reveal any new route plans?

We are hoping to resurrect our Saudi Arabia route. We stopped flights to Saudi Arabia in 2005. Decisions will be made by the network planning organisation at a later date and we'll announce it as soon as we can.

BA's aircraft orders

Boeing 777-200:4 Boeing 777-300:2 Boeing 787:24 Airbus A320:15 Airbus A380:12

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