More cuts planned at carrier
British Airways warned that it expects an operating loss of £150m for the financial year 2009-2010.
This is on top of its predicted loss for the current year 2008-2009, also of £150m.
The UK national carrier which issued a profits warning in January, also warned that it planned to make cuts in underlying costs, excluding fuel, of £220m in 2009-2010 and £80m in 2010-2011.
The warnings came at the airline's investors' day meeting yesterday (March 5) at its headquarters near London Heathrow.
At the day long event, Willie Walsh, the ceo, told investors that the merger with Iberia was being held up over the level of financial control the main company formed from the merger will have over the two airlines.
The cost cuts are expected to lead to more redundancies at BA.
The airline has already shed 2,400 jobs, 5.6% of its 43,000 staff, since last June. This includes 500 managerial staff.
But BA warned yesterday that new cost cuts would involve "additional significant headcount reductions." It is already in talks with unions.
The airline said it has also been reducing its workforce through natural wastage and that would continue.
The new cuts and prediction of losses for two years running come after BA announced a drop of 20.2% drop in its premium traffic for February and an 8.3% drop in all traffic earlier this week.
But Mr Walsh said that apart from the hold up over the aspect of financial control, talks with Iberia were making good progress.
The share ratio between the two airlines which had been the subject of dispute has been settled although on figures have so far been released.
BA had originally wanted a 65-35 split in its favour but the fall in its share vale and the drop in the value of sterling against the Euro led to Spanish claims that the split should be 53-47.
Mr Walsh said he would never accept.
More recently a 55-45 split in BA's favour has been suggested by Miguel Blesa, chairman of Caja Madrid, the biggest shareholder in Iberia, and also deputy chairman of Iberia.
The pension issue - BA has a substantial debt in its pension fund - has also been resolved and the chairman, ceo and cfo of the new top company have also been selected, the airline said.
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