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British Airways 2009/10 Annual Report and Accounts
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The markets we operate in
our business
MATCHING CAPACITY TO DEMAND
The longest and deepest recession in living memory has meant we have had to move quickly to match our capacity to a rapid decline in demand. In February 2010 we saw the first upturn in demand for premium travel in 18 months. With recovery likely to be slow, we will continue to match our flying schedule to demand and to general economic activity as it picks up.
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British Airways 2009/10 Annual Report and Accounts
MARKET OVERVIEW
The global economic and financial crisis coupled with continued high fuel prices has accelerated consolidation in the airline industry. Many passenger and cargo carriers have either gone bust or have been absorbed into other airlines and, overall, the global aviation market remains weak. 2009 saw the collapse of SkyEurope, Flyglobespan and the merger of Alitalia with Air One, for example. In Asia, JAL filed for bankruptcy protection. In Europe, we have announced plans to merge with Iberia. Austrian Airlines, Brussels Airlines and bmi have all been taken over by Lufthansa. In the US, Northwest has merged with Delta and United Airlines and Continental Airlines have announced a merger to create the world’s largest airline.
The markets we operate in
Whilst a number of major developed economies started to emerge from recession during the first half of our financial year, the UK lagged behind. It eventually endured six consecutive quarters of negative growth, amounting to the longest and deepest recession in living memory, before finally emerging from recession in the final three months of 2009. Momentum appears to have been maintained in early 2010, discounting the impact of the severe winter weather we suffered in January.
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British Airways 2009/10 Annual Report and Accounts
23
Global premium air travel demand in key markets, calendar year 2009
Premium demand
The economic...