BA profits boosted by cuts in IT spend

A company-wide cost-cutting programme has helped British Airways boost its end-of-year profits by a third, with cuts in IT spend playing a key part.

A company-wide cost-cutting programme has helped British Airways boost its end-of-year profits by a third, with cuts in IT spend playing a key part.

The airline announced operating profits of £540 million (US$992 million) for the year ended Mar. 31, 2005, compared to £405 million (US$744 million) the year before.

The profits boost came despite the highly publicised increase in fuel costs, with the group's preliminary results statement crediting various cost savings, including "reduced IT spend".

A technology streamlining and simplification programme led by BA CIO Paul Coby has also played a key part in the airline beating its target of achieving £450m (US$826 million) of company-wide savings by £7 million (US$12 million).

BA's outgoing CEO, Rod Eddington, said the airline's focus is now on preparing for the move to Heathrow Terminal Five in 2008 and a continuation of the drive for simplification and a competitive cost base.

"Our focus on cost remains key to long-term profitability," he said in a conference call.

Silicon.com's Andy McCue reported from London.