BA reports first half loss

British Airways has swung to a pre-tax loss of £292m after revenue declined 13.7% for the first half of the year.

British Airways

This compares with a profit of £52m in the same period last year.

The airline, which recently launched a TV-led campaign to encourage people to fly focusing on “opportunities”, has introduced a number of cost cutting measures in recent months. It has also just averted a Christmas period cabin crew strike, although a strike ballot is to continue with results to be announced on 14 December.

Chief executive Willie Walsh, says: “Aviation remains in recession with the International Air Transport Association (IATA) predicting that the industry will lose $11 billion this year.

“We were quick to respond to the crisis by taking out excess capacity and, at the same time, driving down unit costs by 5.2 per cent. This demonstrates how well our costs have been managed in the first half and it’s imperative we continue to deliver on our plans to reduce costs further in the second half. With revenue likely to be £1 billion lower this year, we can’t stand still and further cost reduction is essential.”

BA’s did see operating costs fall 8.7 % and fuel costs for the period were down 17.8 % on last year.

All airlines have come under pressure during the recession, which has had an impact on both business and leisure bookings. BA’s cargo business has also declined with revenue down 30.9%.

Looking ahead, BA said in its report: “IATA has forecast a 15% decline in revenue for the industry this year. Although this will be partially offset by the fall in oil price, IATA has recently revised its global airline loss forecast by $2 billion (£1.2bn) to $11 billion (£6.62 bn) for this year. Our traffic volumes and yields have stabilised compared to a very low base. We are continuing with our cost reduction initiatives to help offset the declines in revenue.

“We continue to focus on excellent customer service to ensure we are the leading global premium airline.”

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