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BA considers cuts after reporting huge slide in profits

BA considers cuts after reporting huge slide in profits British Airways (BA) is considering cutting capacity after revealing a 92 per cent fall in profits due to the high fuel prices and the global financial crisis, according to reports.

The airline reported that pre-tax profits for the period from 1 April to 30 September dropped to £52 million from £616 million during to the same period last year.

However, revenues at the airline actually rose by 6.4 per cent to reach £4.7 billion, despite BA's decision not to follow rivals in slashing its tickets prices to stimulate demand.

BA also performed well on the FTSE 100 stock exchange with its shares rising to a creditable 147.3p each.

The carrier now expects to cut capacity during next summer as part of a cautious view of the immediate future of the aviation industry.

Willie Walsh, BA chief executive, stated his belief at a media briefing that the airline had performed well despite a "very tough economic backdrop".

Problems have been compounded for the airline due to the fact that many of its customers hail from the banking and financial industries, which are both in turmoil.

"This is a good performance given the incredibly difficult trading conditions," said Mr Walsh. "The six month period will be remembered as one of the bleakest on record."

"The period was hit by a crisis in the banking sector, record fuel prices and several airlines going out of business," he added.

BA now intends to reduce capacity by one per cent during next summer with cuts expected on routes from London Heathrow to Edinburgh and Paris, reports the Guardian.


Airline News posted on 07 November 2008

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