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May 21, 2010    

Further blow for BA as it posts record annual loss

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by Kay Murchie

British Airways, which is facing fresh strikes over the next few weeks, has today reported a record £531 million annual loss.

The latest results, which cover the 12-month period to the end of March, include the estimated £40 million loss from the cabin crew strikes which took place during the month.

However, they do not include any drop in revenue caused by the volcanic ash cloud disruption last month.

Meanwhile, the loss is the airline’s biggest annual deficit since it was privatised in 1987 and follows on from last year’s £401 million loss.

In a statement, the airline said: “This is our second consecutive year of record losses but we take heart from the fact that, while our revenue has fallen by 1 billion pounds, so have our costs.”

The airline is currently involved in a long-running dispute with its cabin crew members over cost-cutting measures, which include a pay freeze and a switch to part-time working for thousands of staff.

The airline has admitted in the past that it is fighting for its survival and said the cost-cutting programme is part of a strategy to reduce salary costs.

Yesterday, it was announced that Lord Chief Justice, together with a panel of senior judges, had overturned a ban on industrial action.

The Unite union appealed against a decision earlier in the week which saw this week’s strike cancelled after BA won an injunction.

Cabin crew will embark on a five-day strike, which commences on Monday 24 May, while two more five-day walkouts are scheduled for 30 May-3 June and 5-9 June, the last strike ending just days before the start of the World Cup in South Africa.

BA’s loss comes just a day after Air France-KLM reported a net loss of €691 million for the three months ending March, compared to a loss of €479 million in the same period a year ago.

This took its annual loss for the full year to €1.55 billion (£1.33 billion) – a record loss for the airline and even greater than the €1.3 billion loss it reported in 1993.

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