UK

Worried Airlines After MH17 Could Help Business, Says Defence Giant

01/08/2014 10:56 BST | Updated 01/08/2014 11:59 BST
ASSOCIATED PRESS
A girl holding a candle squats next to candles forming the letters MH17 during an event to mourn the victims of the crashed Malaysia Airlines Flight 17, in Kuala Lumpur, Malaysia, Sunday, July 20, 2014. Rebels have recovered the black boxes from downed Malaysia Airlines Flight 17 and will hand them over to the International Civil Aviation Organization, a rebel leader said Sunday. (AP Photo/Lai Seng Sin)

The head of global defence giant BAE Systems has predicted that his business could benefit from airlines worrying about protecting their airplanes in the wake of the shooting down of Malaysian Airlines flight MH17 over Ukraine.

Ian King, boss of the world's second-largest arms manufacturer, said: “After events that have recently happened to commercial airliners [I can see] a lot more of our technology being used.”

The BAE chief executive suggested that the tragedy would make commercial airlines consider "how do you protect aeroplanes, both to track them and protect them" as well as "whether they need military-grade services".

“They have always been worried about the cost before," he said. "There’s been cost trade off, but companies need to think really carefully going forward."

King was speaking as BAE revealed a 10% drop in revenues for the first half of the year to £7.6 billion and an 8.4% drop in operating profits to £689 million. BAE Systems' products include the Typhoon jet fighter, which carries chaff as defensive equipment to counter missiles.

The BAE boss' warning to airlines comes as British AIrways owner International AIrlines Group (IAG) welcomed its best second financial quarter since the financial crisis.

British Airways' operating profit rose 34% to 332 million euros (£263 million) in the second quarter while Iberia's earnings improved to 16 million euros (£13 million) after a 35 million euros (£28 million) loss the year before.

IAG made a second-quarter profit of 380 million euros (£301 million), 55% ahead of last year. The first quarter of this year saw a loss of 150 million euros (£119 million), though this was narrower than the year before.

The growth came despite a World Cup effect that had created a slight decrease in demand as football fans opted to stay at home to watch the tournament.

Chief executive Willie Walsh said IAG was making "further solid progress", adding: "Our disciplined approach to capacity continues and we will make reductions where it makes sense as we go through the year.

"We are, therefore, trimming planned IAG capacity by around three percentage points for the winter 2014 season. All of our airlines had their highest second quarter operating result since 2007."

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MH17 Crash