BA announces worst ever loss
British Airways (BA) has announced a pre-tax loss of £401 million for the 12 months to the end of March, compared with profits of £922 million the previous year.
While the loss is double what analysts’ estimates, it also represents the biggest loss since the company was privatised in 1987.
Many airlines continue to experience a slump in demand with many forced out of business last year. According to the International Air Transport Association, passenger numbers plummeted 11% in March compared to the same month last year.
According to BA’s chief executive, Willie Walsh, there are “no signs of recovery anywhere”.
Mr Walsh said: “The prolonged nature of the global downturn makes this the harshest trading environment we have ever faced and, with no immediate improvement visible, market conditions remain challenging.”
Fuel costs soared 44.5% due to the high price of oil last year and, as well as being hit with a £3 billion fuel bill, the airline has been hit by a weak pound, which contributed to soaring costs as fuel is purchased in US dollars.
Since last summer, the airline has had to reduce its workforce by 2,500 and confirmed it is discussions with unions about “pay and productivity changes”.
Following the news, BA shares lost 5% to 154p in early morning trading.
Meanwhile, BA is currently in talks with American Airlines and Spain’s national carrier, Iberia, about possible tie-ups.
BA’s news comes just a few days after Europe’s largest airline, Air France-KLM, said it is to axe 2,700 positions.
The carrier suffered a net loss of €505 million (£444 million) in the three month period to the end of March, compared with a €534 million loss compared with the same period a year earlier.