British Airways Plc (BAY, BAY.L) reported a decline in traffic and load factor for the month of March as market conditions remained challenging, with both volume and yield under pressure in all markets.

The airline's March traffic, measured in Revenue Passenger Kilometers, dropped 7.3% to 9.14 billion. Traffic comprised a 13% decrease in premium traffic and a 6% decline in non-premium traffic.

Passenger capacity, measured in Available Seat Kilometers, was up 0.9% for the month to 12.58 billion from 12.47 billion in previous year month. Passengers carried in the month were 2.61 million, down 8.2% from 2.84 million last year.

Passenger load factor declined to 72.7% from 79.1% in the year-ago month. Overall load factor was down 5.5 points to 68.8% from 74.3% in March 2008. Cargo, measured in Cargo Tonne Kilometers, fell 10%.

For the month of February, British Airways' revenue passenger kilometers were 7.70 billion, compared with 8.41 billion last year. Available seat kilometer for the period decreased to 10.71 billion from 11.76 billion in previous-year period. February passenger load factor rose to 72% from 71.5% prior year. Overall load factor in February decreased to 68.1% from 69.7% a year-ago.

For the fiscal year ended in March 2009, traffic declined 3.4% and passenger capacity edged down 0.7%. While passenger load factor declined to 77% from 79.2% last year, overall load factor dropped to 72.1% from 73.4% a year ago.

The company had earlier said that the full-year result would be impacted by one-off items such as the significant snowfall in early February, which severely restricted operations for several days, and any additional severance costs through end of March as the company continues to restructure its business. These are expected to be some GBP 20 million and GBP 35 million, respectively.

British Airways also said that its revenue outlook for the full year would be impacted by some GBP 20 million to GBP 25 million due to the weakness in volume and yield, particularly in US traffic. Including the impact of weaker revenue for the year, the airline expects to report fiscal 2009 operating loss of about GBP 150 million before total severance costs of GBP 75 million.

BAY.L is trading at 165.10 pence, up 9.40 pence, on a volume of 21.72 million shares.

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