12 December 2022, etc.venues Monument, London
Business Travel Show Europe, presented by The BTN
21 November, London Hilton Metropole
Airline to ground 22 aircraft
British Airways has today (July 31) reported a £148m pre-tax loss in the first quarter of the year.
The airline also suffered an operating loss of £94m compared to a £35m profit in the same quarter 2008 while pre-tax earnings fell 53.4% to £118m.
BA's ceo Willie Walsh said: "Trading conditions continue to be very challenging with underlying revenue down 16.8% and no visible signs of improvement.
"While traffic volumes are down considerably compared to last year, they have stabilised during the quarter and show some signs of improvement for the peak summer months."
Mr Walsh said that with yields still volatile and revenues weak, there was "much more to be done".
But he added: "Our work to reduce costs, which started last October, is beginning to bear fruit."
Mr Walsh announced a plan to cut capacity in winter next year when 22 aircraft will be grounded.
The airline will also extend the delivery schedule of its first A380 by five months with the second delayed by two years.
Mr Walsh said that talks with unions to further reduce staff spend were ongoing. He said manpower had been cut by 1,450 since March this year through reduced overtime, increased part-time working and voluntary redundancy.
He said: "The airline is confident of achieving previously indicated targeted reductions by March 2010. Our engineers and pilots have voted for permanent change. This is a great step forward."
The record losses were driven by a 12.5% drop in passenger revenues year-on-year and a 3.1% cut in capacity.
A 9.7% drop in yields was the result of passengers choosing seats in less expensive cabins.
BA said its financial position remained strong with a cash reserve of £1,258m at the end of June, down £123m on March 2009.
"The industry continues to face very difficult trading conditions, with considerable uncertainty over the likely timeframe of the recovery from the global economic downturn," the airline said in a statement.
Volumes are expected to improve over the peak summer period, but yields are under pressure from lower fuel surcharges.
"Yield uncertainty continues to make revenue forecasting difficult. Based on current fuel prices and exchange rates the full year fuel bill is expected to be between £450-500m lower than last year," said BA.
Earlier this week BA said it was to scrap free meals after 10am on flights under two-and-a-half hours, in a bid to save £22 million per year.
BA is making more cuts to its services this winter, with flights to the US most affected. The UK national carrier is cutting services to New York JFK from seven to six a day and to Newark by three to two a day.