British Airways Plc Chief Executive Officer Willie Walsh said it will take the airline a decade to get back a 350 million-pound investment ($689 million) in moving to Terminal 5 at London's Heathrow airport.
``We'll break even over a 10-year period,'' Walsh said yesterday in an interview in London. `We've made that investment on the basis that it will pay for itself.''
The airline, Europe's third-largest, expects to move to the new terminal in March 2008. The shift will consolidate British Airway's operations, including check-in staff and aircraft, in one location. The company currently operates out of Terminals 1 and 4.
``I don't think the market is anticipating a 10-year payback,'' said Penny Butcher, an analyst at Morgan Stanley with an ``equal weight/cautious'' rating on the stock. Investors were ``hoping for the saving to come through quicker.''
Shares of British Airways fell 6.75 pence, or 1.2 percent, to 567.25 pence today in London. The stock has nearly doubled since Walsh succeeded Rod Eddington as CEO in October 2005.
Walsh, 45, has pledged to cut 450 million pounds in costs at the airline and boost its operating profit margin to 10 percent.
Source: Bloomberg
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