More job cuts as BA loss hits £160m
British Airways today announced one of its worst results ever, with losses of £ 160million for the quarter after 11 September.
The severe impact of the terrorist hijackings brought BA losses for the financial year to date to £115million - compared to pre-tax profits of £215million for the same period a year ago.
Thousands of job losses are now feared on top of the 7,000 already announced. Reports at the weekend suggested that a further 9,000 jobs could be axed.
However, the struggling airline's performance over the three months to the end of December was better than expected. The company had been braced for losses as severe as its worst quarterly pre-tax losses of £220million in the Gulf War in 1991. BA chief executive Rod Eddington said the results reflected the "massive impact on revenue of 11 September and the ongoing economic slowdown". He said the airline had made "real progress" and was through the worst period, adding: "What we need is some calm weather. What we have currently is a strong headwind."
Today's results round off a disastrous start to 2002 for BA as it struggles to recover from 18 months of disappointing performances prior to 11 September. It suffered a further setback last month when it pulled back from allying with American Airlines because US Department of Transportation conditions were too harsh.
The downturn since 11 September has hit BA harder than many airlines. Numbers of business passengers - the market BA relies on for almost all its profits - slumped by 27 per cent for October to December on the previous year. Overall passenger levels were down by 16 per cent on 2000.
The City reacted positively, with BA's shares up 21/2p to 215p in the opening minutes of trading today. The losses compare to a pre-tax profit of £5 million for the previous quarter.
BA will announce a major restructuring programme this month and the airline is now under even greater pressure to limit its operating costs and become more competitive.
The group's Future Size And Shape review, launched in November in response to the tough conditions, is expected to include massive job cuts from BA's 57,000 staff. A weekend report said BA's payroll is expected to shrink by 16,000 over the five years from last March.
A BA spokeswoman said: "We are downsizing by around 7,000 and will be looking at whether we need to downsize any further." She said there was a possibility of further cuts but added: "There are lots of possibles."
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