Leadership

BA posts £164m pre-tax loss on strikes, ash cloud

30.07.2010
British Airways (BA) has reported a pre-tax loss of £164m for the first quarter of its financial year, following cabin crew strikes and disruptions caused by the Icelandic volcanic ash cloud. This was up from the £148m pre-tax loss BA posted during the same April-June period in 2009.

However, the UK airline managed to narrow its operating loss for the quarter to £72m, compared to the £94m operating loss reported during the same period in 2009.

Total revenue in the period was down 2.3pc. Passenger revenue meanwhile was down 3.4pc, on capacity down 11.2pc. Without the disruption during the period, passenger revenue would have increased by some 11pc year-on-year, BA said.

The airline said its cargo business had seen strong performance, with revenue increasing by 36.7pc.

Operating costs meanwhile were down 3.3pc, with fuel costs down 0.7pc.

BA also said the impact of all disruptions during the quarter were in line with previous estimates of £250m.

BA chief executive Willie Walsh said that despite the carrier’s revenues and cost being hit by the closure of UK airspace following the Icelandic volcanic eruption and the impact of cabin crew industrial action, its financial performance improved during the quarter through underlying revenue increases and further cost reductions.

“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,” he said.

BA also said underlying market conditions continue to show improvement.