British Airways has reported a drop in pre-tax profits from September to December 2007 to ”113m ($222m), from ”166m ($327m) last year. The news comes just days after BA reached a last-minute deal with the Transport and General Workers' Union (T&G) to avert a strike by cabin crew.
BA has attributed much of the financial woe to severe fog before Christmas and the failure of the baggage system on two occasions in December at Heathrow's Terminal 4. About ”40m ($79m) is credited to these problems, which still would have meant a drop in earnings from 2005.
For the next quarter, January to March, the outlook does not look any better. The airline says it expects to lose ”80m ($157m) in revenues as a result of the cabin staff dispute. Reports from Heathrow say that T4 is "quiet".
Chief executive Willie Walsh said the "patience and loyalty" of BA's passengers had been tested by the setbacks over Christmas. "I want to apologise for the inconvenience they have suffered during this period," Mr Walsh noted.
BA said it was cutting its full-year revenue guidance to 3.25%-3.75% growth, compared with a 4.5%-5% forecast in November. The good news is that T5 is now a little over 12 months away and providing the airline can get its commercial act together profits should take off.