British Airways has announced a pre-tax profit of £620 million for the year to 31 March 2006 (2005: £513 million profit). The pre-tax profit for the fourth quarter was £91 million (2005: £6 million loss).

Operating profit for the year was £705 million (2005: £556 million profit) and £93 million for the quarter (2005: £46 million profit). The operating margin was 8.3 per cent (2005: 7.2 per cent) and 4.4 per cent in the quarter (2005: 2.5 per cent).

Net debt at £1.6 billion fell by £1.3 billion during the year, a £5 billion reduction since its December 2001 peak. Operating cashflow was £1.3 billion, an increase of £334 million.

Willie Walsh, British Airways’ chief executive, said: “These are good results with revenue performance driven by improvements in seat factors and yield.

“We achieved an operating margin of 8.3 per cent and as a result all our staff will share in a £48 million bonus. We remain committed to our goal of reaching a 10 per cent margin by 2008. Our shorthaul business is now in profit for the first time in 10 years but we have still more to do.

“Total costs, however, are up 8.2 per cent with fuel and employee costs a challenge. Our annual fuel bill rose by 44.7 per cent to £1.6 billion. Employees costs were up 5.0 per cent.”