British Airways has reported a 91.6% dive in pre-tax profits for the first half of the year. Willie Walsh, the airline’s chief executive, says the period “will be remembered as the bleakest on record”.
The group says pre-tax profits fell to £52m from £616m for the same period last year. Walsh says: “The period was hit by a crisis in the banking sector, record fuel prices and several airlines going out of business.”
Despite the drop in profits, the company saw a 5% rise in revenue on the same period last year. Costs rose by £711m, mainly due to rising oil prices, which accounted for £511m of the rise.
It warns that its trading outlook remains “very difficult” due to the economic climate. The carrier says it will reduce its number of flights by about 1% in 2009 in anticipation of less demand from travellers.
The company says it has also been hit by a weakening pound, which added £100m to its costs, and it says that this was likely to continue during the second half. The airline says further costs have been added by BAA, the airport operator, which has raised fees at Heathrow and Gatwick by 38% and 36% respectively.
Meanwhile, BA claims there have been improvements at Heathrow’s Terminal 5, following its chaotic opening in April. Walsh says the terminal is now “running smoothly”.