British Airways PLC (BAY.LN) Wednesday said lucrative premium traffic fell further in February, but, due to capacity cuts, proportionately it filled more seats.

BA's passenger load factor, which measures how many of the airline's available seats it filled with paying passengers, last month rose 0.5 percentage points to 72%.

Traffic measured in revenue passenger kilometers (RPKs) fell 8.3% from a year earlier to 7.7 billion RPKs, with total passenger numbers down 10.1% to 2.2 million.

In contrast, budget airline Ryanair Holdings PLC (RYA.DB) Wednesday announced a 7% increase in the number of passengers carried in February to 4.1 million compared to 3.8 million last year. It also said its February load factor increased three percentage points to 78%.

George Stinnes, BA's treasurer and head of investor relations, told reporters he didn't think that BA was losing market share to low-cost carriers such as easyJet PLC (EZJ.LN) and Ryanair.

BA's premium traffic dropped 20.2% on the year, with non-premium traffic off 5.5%. Premium traffic in January fell 13.7% year-on-year. BA generates a significant amount of its profits from premium travelers, particularly on transatlantic routes.

Data was distorted because there was an extra day in February in 2008, a leap year, which the company said had a 3.5% negative impact. In addition, snowfall in southeast England last month disrupted traffic, which Stinnes said had another 3% negative effect on capacity.

Routes BA operates to Asia Pacific were hardest hit, down 18.8%, while U.K./European routes were down 9.4% on an RPK basis. The Americas region was also hit, down 7.2%.

That trend was confirmed by AMR Corp.'s (AMR) American Airlines, which said international traffic in February fell 13.2% year-on-year despite a 6.3% reduction in capacity. Its domestic traffic decreased 13.7% year-on-year on 12.4% less capacity. Traffic was down 13.5% and capacity 10.1% in total.

Its passenger numbers fell 13% to 6.2 million and its load factor shrank 2.9 percentage points to 73.9%.

U.S. airline stock had risen after carriers disclosed capacity cuts, but gave up those gains after the BA data had been released.

BA, American and Spanish carrier Iberia Lineas Aereas de Espana SA (IBLA.MC) currently are seeking antitrust immunity from the U.S. Justice Department for a three-way joint venture.

Stinnes said despite weak Americas numbers the U.K. carrier would continue to focus on selling tickets in the U.S. and in preference to the U.K., so it could benefit from the strength of the dollar against sterling. He said U.S. exposure was "beneficial" adding that many economists expected the U.S. economy to recover from recession first.

"Market conditions remain challenging but broadly in line with previous expectations," BA said.

Cargo, measured in cargo ton kilometers, fell 20.7%, but Stinnes added this decline was better than its competitors given that BA's cargo business was smaller and focused on the high-end value, such as perishables goods.

At 1548 GMT, BA shares traded up 7.1 pence, or 5.6%, at 133.6 pence. Ryanair traded up EUR0.22, or 7.9%, at EUR3.

 
   KEY EUROPEAN AIRLINE FEBRUARY TRAFFIC: 
 
   AIRLINE          RPKs     Chg On Yr   PASSENGER NOS Chg 
   British Airways  7.71 Bln   -8.3%      2.22M    -10.1 % 
   Ryanair          n.av       n.av       4.13M    +7% 
   EasyJet          Due Mar   5 
   Air Berlin       Due Mar 
   SAS              Due Mar 
   Lufthansa        Due Mar 
   Iberia           Due Mar 
   Aer Lingus       Due Mar 
   Air France-KLM   Due Mar 
   Alitalia         Due Mar 
 
   Company Web site: www.britishairways.com 
                     www.ryanair.com 
 
   -By Kaveri Niththyananthan, Dow Jones Newswires; 4420 7842 9299; kaveri.niththyananthan@dowjones.com