BMI announces rising profits

The bmi group today reported a pre-tax profit of £10 million for the financial year ending 31 December 2005, up from £2.6 million in 2004. Group turnover rose 4.7% to £869m (2004 £830m), on an increase in revenue passenger kilometres (RPKs) of 6.3% to 9,325 million. At an operating level the group moved from a loss of £3.2m in 2004 to a profit of £5.5m in 2005. According to chairman Sir Michael Bishop, the improved performance was a result of the group’s focus on yield growth within each of its airlines, on more efficient and effective use of aircraft and other infrastructure and on rigorous cost control across the business. The launch of BMI’s first long-haul routes from Heathrow - to Mumbai and Riyadh - marked an important step forward in the group’s development. The airline will extend the number of long-haul destinations it serves from Heathrow with the launch next month of a three-times-weekly service to Jeddah. bmi regional continues to make a solid contribution to the group’s overall profitability and has further extended its route network in 2006 with services between Aberdeen and Amsterdam. Bmi baby continues to widen its market penetration and presence. The UK’s second-largest low-cost carrier launched services from its fifth base at Birmingham at the start of 2005, which proved to be its most successful launch to date. The group’s improved figures come despite the continuing impact of high oil prices, which cost the group £37.5m in 2005. As in past years, part of this cost was recovered through passenger fuel surcharges. "We have a very clear strategy," said Bishop. "In our mainline business we are focusing on quality business-purpose traffic and at the same time managing the availability of the lower yield traffic. "We are willing to accept volume reductions in certain markets if it improves overall levels in yield, resulting in increased profitability. This was the case last year and is the case so far this year, where we are already ahead of our comparative 2005 financial performance."

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