BA posts £531m pre-tax loss as talks restart to avert strike
Published 22/05/2010 | 05:00
British Airways (BA) posted a record pre-tax loss of £531m (€608m) in its last financial year as it coped with a fall in passenger numbers and a £1bn (€1.15bn) decline in revenue to just under £8bn (€9.2bn). But chief executive Willie Walsh said yesterday that he expected the airline to break even this year.
The upbeat forecast from the former Aer Lingus boss came as he prepared to knuckle down with union representatives last night in a last-ditch effort to thwart another major strike by cabin crew due to begin on Monday.
The action is the latest battle in an on-going war of attrition between the airline and Unite. Union members are resisting cuts that Mr Walsh says are needed to place BA on a firmer financial footing.
Mr Walsh said yesterday: "We will continue to engage with them to bring an end to a dispute which I have made clear is quite unnecessary, completely unjustified and should be put behind us as soon as possible."
Operating losses at BA halved during the quarter to the end of March, to £145m (€166m), while its net loss of £425m was lower than the £470m that had been predicted by analysts.
Its fuel bill was £597m lower during the year as oil prices retreated, while other expenses were slashed by £397m as the airline renegotiated contracts and pay conditions with pilots and ground staff, and flew fewer flights.
Mr Walsh said a return to profitability required "permanent change across the company" and it was "disappointing that our cabin crew union fails to recognise that".
He added that the airline's current financial year "could hardly have had a worse start" with the ash fallout from the volcanic eruption in Iceland that grounded flights across Europe in April for a number of days.
Despite that, the number of corporate seat bookings with BA has begun to rise on its transatlantic routes.
Mr Walsh added that an "improved" cost base coupled with a more general improvement in market conditions had led him to predict a break-even position in this financial year.