British Airways has posted an 88% drop in its first quarter profit after being hit by soaring oil prices. It has also attributed the fall to the slowdown in the economy and low consumer confidence.
The airline has posted a pre-tax profit of £37m in the three months to the end of June. This is compared to the £298m it posted the previous corresponding period and signalled a 88% drop in profit.
BA says it is expecting its fuel bill to reach £3bn in the year to March 2009 and has already announced that it would cut flights by 3% during the winter in order to reduce its overheads.
BA chief executive Willie Walsh (pictured) says: “This is the worst trading environment the industry has ever faced, and fares are likely to go up as we reduce some winter capacity and cope with unprecedented oil prices, but we won’t be grounding any aircraft.”
Earlier this week, the carrier revealed that it was in merger talks with Spanish airline Iberia.