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BA reports £45million pre-tax loss
British Airways has unveiled losses for the first quarter of the year of £45 million, substantially less than the £60-£70 million loss that analysts had predicted.
But this relatively good news was more than tempered by BA’s admission that the direct cost of the recent wildcat strikes at Heathrow – which will hit the next quarter’s results – could be as much as £40 million. While the airline and the unions yesterday announced that they had managed to reach agreement, BA chief executive Rod Eddington warned this morning that the unofficial action has hit future bookings and will reduce revenue.
The £45 million pre-tax loss for the three months to June 30 compares to a profit of £65 million during the same quarter in 2002. The airline said the reduction was due to the economic downturn, the war in Iraq and the impact of SARS.
However BA said that its Future Size and Shape recovery programme had helped to ensure that the losses were not even greater. According to the airline most areas of operating costs have been reduced – including cutting sales and distribution costs by £125million in the three month period against a target of £100 million.
BA boss Rod Eddington said: “This is the most testing period in aviation history. It continues to be an extremely challenging revenue environment due to the effect of SARS, the war in Iraq plus the ongoing economic weakness. Future Size and Shape cost efficiencies have partially offset the weak revenue in the first quarter.”
He added: “We will work hard to restore British Airways’ reputation with our customers.”
The dispute over the introduction of the BA Automated Time Recording (ATR) electronic signing-in was resolved last night (Wednesday). The system will now be voluntary until September 1. In return BA has agreed that a 3% pay rise will not be linked to acceptance of the new system, that it will not affect staff pay, and will not affect the way rotas are drawn up or mean the introduction of annualised hours.
The two day wildcat strike which took place almost two weeks ago led to 500 flights being cancelled and chaos at Heathrow airport with thousands of passengers stranded and vowing never to fly with BA again.
See other recent BA stories:
31-Jul-2003: BA’s talking scrap, says Virgin
25-Jul-2003: Agents unconcerned by BA plight
25-Jul-2003: TravelMole Comment: BA needs friends, not enemies
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