British Airways’s problems mounted yesterday after it disclosed a 5 per cent fall in business-class passengers last month and a £16 million bill so far for the chaotic opening of Terminal 5 (T5).

First and business-class passengers are thought to account for more than 60 per cent of BA’s profits but the worsening economic climate has forced them to cancel travel plans. BA blamed March’s fall on an early Easter but aviation sources said that the drop was a direct result of the poor economic environment. Total passenger numbers were down 2.8 per cent to 2.72 million and economy-class numbers were down 2.3 per cent compared with the same month last year.

The difficulties at T5 are likely to have contributed to the poor March numbers as BA had to cancel hundreds of flights last week. BA said yesterday that the Heathrow T5 debacle would cost £16 million and it still has 14,000 bags to reunite with passengers. It has so far cancelled 431 flights.

The airline is hoping to get back to a normal schedule at the £4.3 billion terminal on Saturday, although it still has to move 30 per cent of its flights from Terminal 4 later this month.

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BACKGROUND

• T5 hit by new flights fiasco

• Terminal problems for BA’s Walsh?

• Lost BA bags sent to Milan

• BA reviews transfers to T5

• Unions had warned BA over chaotic move

Related Internet Links

• VIDEO: Ben Webster on BA and the blame game

Related Internet Links

• AUDIO: Ginny McGrath onboard one of the first flights out of Terminal 5

Related Internet Links

• Video: Chaos at Terminal 5

Multimedia

• Pictures: Heathrow's Terminal 5 chaos

Related Links

• Lost BA bags sent to Milan

• Pilots' strike threat puts pressure on BA chief

Analysts had predicted that the T5 chaos could cost BA up to £50 million but investors were not reassured by the £16 million estimate yesterday and BA’s share price fell 9¼p.

The T5 costs do not include damage to the airline’s reputation but George Stinnes, BA’s treasurer, said: “The impact of the T5 difficulties has been small with no impact on bookings.”

Last night, Colin Matthews, the new chief executive of BAA, the airport’s operator, spoke out for the first time about T5, apologising for the debacle.

“At the right time we should sit down with BA and understand every single lesson there is to be learnt,” he said.

Aviation analysts are downgrading airlines in America and Europe as their economies slow. Falling ticket sales and rising debt costs have forced three US airlines to close in the past two weeks. ATA Airlines, of Indianapolis, filed for bankruptcy protection yesterday after similar moves by Champion Air and Aloha Air.

Meanwhile, Ryanair, the low-cost carrier, said its passenger numbers rose by 19 per cent to 4.48 million against March last year. Its aircraft flew 79 per cent full last month.

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