January 30, 2010
British Airways heading for a £1bn loss
Robert Lea Industrial Editor
British Airways is heading more than £1 billion of losses during the steepest aviation recession to date.
The UK flag carrier will report deepening losses next week during the third quarter of its financial year — which includes Christmas. It is shaping up as the worst financial year in BA’s history, with losses as much as 50 per cent greater than last year.
The consensus forecast from City analysts for BA’s latest trading update, due next Friday, is that the airline will report losses of £151 million for the three months to the end of December, taking its losses to £443 million for nine months.
BA is in the middle of its final quarter, the difficult winter months, and analysts forecast further losses. Overall, for the 12 months to the end of March, the consensus is a loss of £602 million — more than £200 million more than the record £401 million reported for 2008-09. Moreover, after two years of struggle, several analysts expect further full-year losses in 2010-11.
BA declined to discuss trading ahead of its results but analysts are certain that the threat of strikes before Christmas and then some of the worst weather in 30 years took their toll.
BA passenger numbers have been nearly 3 per cent lower over the past nine months and BA has revealed that passenger numbers were down 4 per cent in December. Christmas is usually a strong month for BA, with passengers on seasonal getaways or flying to friends and family, but the latest figures show that the passenger numbers for economy class are falling faster year-on-year than those for business and first class.
Andrew Lobbenberg, aviation analyst at Royal Bank of Scotland, said that areas of concern included “the industrial relations situation, progress towards a definitive merger agreement with Iberian, progress towards granting anti-trust immunity with American Airlines, and progress in defining a plan to resolve the pension deficit”.
After calling off a Christmas walkout, Unite, the union, is balloting 12,000 BA cabin crew over strike action in the spring. The ballot closes on February 22 and, if cabin crew vote in favour, strikes could start as early as March 1.
IATA, the airline industry body, said this week that the outlook for the industry in 2010 should improve but only because 2009 was so bleak. “In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen,” it said.
(Times online)
British Airways heading for a £1bn loss
Robert Lea Industrial Editor
British Airways is heading more than £1 billion of losses during the steepest aviation recession to date.
The UK flag carrier will report deepening losses next week during the third quarter of its financial year — which includes Christmas. It is shaping up as the worst financial year in BA’s history, with losses as much as 50 per cent greater than last year.
The consensus forecast from City analysts for BA’s latest trading update, due next Friday, is that the airline will report losses of £151 million for the three months to the end of December, taking its losses to £443 million for nine months.
BA is in the middle of its final quarter, the difficult winter months, and analysts forecast further losses. Overall, for the 12 months to the end of March, the consensus is a loss of £602 million — more than £200 million more than the record £401 million reported for 2008-09. Moreover, after two years of struggle, several analysts expect further full-year losses in 2010-11.
BA declined to discuss trading ahead of its results but analysts are certain that the threat of strikes before Christmas and then some of the worst weather in 30 years took their toll.
BA passenger numbers have been nearly 3 per cent lower over the past nine months and BA has revealed that passenger numbers were down 4 per cent in December. Christmas is usually a strong month for BA, with passengers on seasonal getaways or flying to friends and family, but the latest figures show that the passenger numbers for economy class are falling faster year-on-year than those for business and first class.
Andrew Lobbenberg, aviation analyst at Royal Bank of Scotland, said that areas of concern included “the industrial relations situation, progress towards a definitive merger agreement with Iberian, progress towards granting anti-trust immunity with American Airlines, and progress in defining a plan to resolve the pension deficit”.
After calling off a Christmas walkout, Unite, the union, is balloting 12,000 BA cabin crew over strike action in the spring. The ballot closes on February 22 and, if cabin crew vote in favour, strikes could start as early as March 1.
IATA, the airline industry body, said this week that the outlook for the industry in 2010 should improve but only because 2009 was so bleak. “In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen,” it said.
(Times online)
