BA slumps to first-quarter loss
LONDON: Struggling British Airways said Friday that it slumped to a pre-tax loss in its first quarter and warned the outlook remained uncertain as the global downturn slashes demand for air travel.
BA said in a results statement that it made a pre-tax loss of 148 million pounds (173 million euros, 245 million dollars) in the three months to June, compared with a profit of 37 million pounds in the 2008 quarter.
The group also chalked up an operating loss of 94 million pounds, reversing a year-earlier profit of 35 million pounds.
The airline warned that it would slash costs even further because business conditions continued to be very difficult -- and there was considerable uncertainty over the outlook for the airline industry as a whole.
"Trading conditions continue to be very challenging with underlying revenue down 16.8 percent and no visible signs of improvement," Chief Executive Willie Walsh said in the earnings release.
"While traffic volumes are down considerably compared to last year, they have stabilised during the quarter and show some signs of improvement for the peak summer months. However, yields remain volatile.
"Our work to reduce costs, which started last October, is beginning to bear fruit as they are down 6.6 percent -- but with revenue still weak, there is much more to be done."
The embattled group said it was unclear when the world economy would recover from the current deep downturn.
"The industry continues to face very difficult trading conditions, with considerable uncertainty over the likely timeframe of the recovery from the global economic downturn," BA said.
Leading commercial airlines across the globe are suffering from the massive global economic slump that has slashed demand for air travel and sparked a major cash squeeze for the sector.
In a bid to turn around its fortunes, BA is slashing capital expenditure and cutting around 3,700 jobs during its current financial year to March 2010. BA slashed 2,500 jobs worldwide in 2008-09.
Other cost-saving measures have included pay-freezes and asking staff to work unpaid for up to one month.