British Airways profits fly

Rod Eddington has ordered the return to Britishness

Europe's largest airline British Airways has reported a sharp rise in pre-tax profits for the year from just £5m to £150m.

Full-year operating profits rocketed to £380m pounds from £84m last time.

BA is also making more money from each customer than it has done since it was privatised in 1987.

Analysts said the profit figures show that the strategy by Australian chief executive Rod Eddington of cutting back capacity on unprofitable routes, targeting big spenders and offering flat beds in business class is showing results.

British Airways shares soared on the news to close up 5.6% on Tuesday.

"The star number is that passenger yields [the money made per passenger per mile] rose 11.5% in the fourth quarter, which indicates that their strategy is working," said Williams de Broe analyst Andrew Darke.

Mr Eddington took over at the helm last May, after the former chief Bob Ayling was ousted.

Cutting back

BA also announced plans to cut back capacity by up to a further 9% this year as it positions itself for slower world economic growth.

It is also taking into account the impact of the foot-and-mouth epidemic, which has slashed tourism numbers in the UK.

BA was forced to restructure this year after it was hit by tough competition from rivals - some of them low-cost airlines - and higher fuel prices.

The cost of restructuring added a further pull on its profits, but this should be a short-term effect.

BA has also decided to ditch the existing world images from its aircraft tailfins and replace them with the Chatham Dockyard Union Flag - a waving Union Jack.

Go

Additionally, the airline is selling its low-cost airline Go for an expected £100m and talks with potential buyer, the venture capital group 3i Group, are ongoing.

"I'm confident that we'll complete with 3i, but there are a couple of people waiting in the wings," said Mr Eddington, denying that the airline had ever set a time by which Go would be sold.

Earlier, analysts had expected Go to be sold by the end of this year.