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Carrier posts loss, sees no signs of improvement
By Jane Wardell |
August 1, 2009, Saturday
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Print Edition
Print Edition
BRITISH Airways Plc warned there were "no visible signs of improvement" in the recession-hit airline industry as it posted a 94 million pound (US$155.5 million) quarterly loss yesterday, despite noting a seasonal summer uptick.
BA said it would continue to focus on stripping costs out of the business, reporting that its efforts so far have resulted in a 6.6 percent reduction in operating costs since October.
The airline is seeking to slash some 3,700 jobs from its 40,000-strong work force and freeze pay for several years.
It has also taken 5 percent of its winter flight capacity out of service and even dropped meals on short-haul flights.
The operating loss is the first time since BA was privatized in 1987 that it has recorded a deficit at the beginning of the fiscal year, which is usually the second-strongest earnings period after the summer peak -- the airline earned a 35 million pound profit in the same period a year ago.
Revenue in the fiscal first quarter ending June 30 fell 12 percent to 1.98 billion pounds from 2.25 billion pounds. The airline did not provide net profit details.
Chief Executive Willie Walsh said while traffic volumes were down, they had stabilized somewhat during the quarter and showed some signs of improvement.
Other carriers have also succumbed to the market downturn, with Air France-KLM reporting a 20.5 percent fall in first quarter revenue and Lufthansa posting an almost 20 percent drop in revenue on Thursday.
BA said it would continue to focus on stripping costs out of the business, reporting that its efforts so far have resulted in a 6.6 percent reduction in operating costs since October.
The airline is seeking to slash some 3,700 jobs from its 40,000-strong work force and freeze pay for several years.
It has also taken 5 percent of its winter flight capacity out of service and even dropped meals on short-haul flights.
The operating loss is the first time since BA was privatized in 1987 that it has recorded a deficit at the beginning of the fiscal year, which is usually the second-strongest earnings period after the summer peak -- the airline earned a 35 million pound profit in the same period a year ago.
Revenue in the fiscal first quarter ending June 30 fell 12 percent to 1.98 billion pounds from 2.25 billion pounds. The airline did not provide net profit details.
Chief Executive Willie Walsh said while traffic volumes were down, they had stabilized somewhat during the quarter and showed some signs of improvement.
Other carriers have also succumbed to the market downturn, with Air France-KLM reporting a 20.5 percent fall in first quarter revenue and Lufthansa posting an almost 20 percent drop in revenue on Thursday.
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