British Airways says it is still on course to break even at the end of the current financial year in spite of posting a pre-tax loss of £164 million for the three months to the end of June.
The pre-tax loss was £16m higher than for the same period last year, although the airline’s operating loss was down £22m to £72m for the quarter.
“Despite both revenues and cost being hit by the closure of UK airspace following the Icelandic volcanic eruption and the impact of industrial action, our financial performance improved during the quarter from underlying revenue increases and further cost reductions," said chief executive Willie Walsh.
“The trends in our passenger and cargo traffic continue to be positive with yields up and costs down.
"Together this led to a reduced operating loss for the period though pre tax losses increased as a result of additional finance costs and the impact of non cash foreign exchange movements."
Walsh said all disruptions during the quarter cost the airline £250m, which was in line with its expectations.
During the three months the airline saw passenger revenue slide 3.4 per cent, but Walsh said that without the disruption passenger revenue would have increased 11 per cent year on year.
Operating costs were down 3.3 per cent. Fuel costs were down 0.7 per cent, and other non fuel costs reduced by 4.3 per cent.
The airline is left with a cash balance of £1,749m, up £35m from the end of the last financial year.
"While some economic experts are flagging the risk of a “double dip” recession, the steady recovery continues and, on that basis, we continue to target to break even at a profit before tax level for the full year as we move forward on our strategic objectives and continue to build on our excellent customer service," added Walsh.
By Linsey McNeill
