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July 30, 2010    

British Airways hit by ash cloud and strikes

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by Kay Murchie

British Airways (BA) today announced losses widened after the airline was hit by disruption from the volcanic ash cloud and cabin crew strikes.

The company said pre-tax losses widened 10.8% to £164 million for the three months to the end of June, compared with the £148 million loss it made in the same period a year earlier.

Meanwhile, revenues dipped 2.3% to £1.93 billion against the same period a year earlier.

The ash cloud meant many flights had to be cancelled and had a major impact on other airlines.

Ash from the volcano, located under the Eyjafjallajokull glacier about 100 miles east of the capital Reykjavik, erupted in the early hours of 14 April.

It forced the closure of Europe’s airspace for 18 days in April and May.

Meanwhile, BA was also hit by the cabin crew strikes, which occurred for a total of 15 days in the quarter.

Cabin crew are in a bitter dispute with the airline over cost-cutting measures, which include a pay freeze, a switch to part-time working for thousands of staff, as well as removing travel perks, which were stripped from members during the strike in March.

However, BA is optimistic for the remainder of the year. Chief executive Willie Walsh said: “While some economic experts are flagging the risk of a ‘double dip’ recession, the steady recovery continues and, on that basis, we continue to target to break even at a profit before tax level for the full year.”

In related news, earlier this month the European Commission approved BA’s merger with Spain’s Iberia.

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