British Airways today announced record annual losses of £401m, marking the airline's worst result seen since its privatisation in 1987.
The carrier's nosedive into the red comes after record profits of £922m the previous year and reveals the impact of the fuel hikes and dampened demand amid the recession.
The airline suffered a near-£3bn fuel bill in last year's oil price bubble.
BA confirmed it is now offering staff unpaid leave and the option to go part-time, having already frozen pay and axed more than 2,500 roles since last summer to cut costs.
Management has also decided to forgo bonuses and the group is not offering any dividend payout to shareholders under a drive to offset BA's trading troubles.
BA said it had suffered in the "harshest trading environment we have ever faced", with revenues in the fourth quarter alone down 8.4% and pre-tax losses of £331m.
The global economic decline has hit the carrier's premium travel market and the airline has lost 13% of the market in the last six months of the year.
The group has been forced to offer cut-price discounts to keep non-premium travel broadly flat over the year.
Martin Broughton, chairman of BA, said: "In the last 12 months we have gone from a record profit to a record loss due to the current tough economic environment."
He added: "That only serves to underline the extremely difficult trading conditions that we are facing, despite our best ever operational performance, and any recovery is likely to take longer than initially envisaged."
The company warned there will be further job losses but declined to say how many of its 40,000 workforce would be affected.
It said talks with unions over changes to productivity and pay were progressing well in some areas but said discussions were going slowly in relation to ground staff and cabin crew.
"Today's numbers really are a comprehensive tale of woe, with almost every metric eligible for intensive care as BA heads deep into the perfect storm," said Richard Curr, head of dealing at CFD specialists Blue Index.
"Worryingly, BA's net debt position is soaring, and while the merger with Iberia should bring some stability and economies of scale, there is little else to look forward to in the near term."
BA admitted its merger plans with the Spanish airline were being held up by the internal trading issues faced by both groups.
Willie Walsh, chief executive of BA, said: "We're still in discussions - clearly those discussions have been ongoing for some time now.
"Iberia said they are focused on what needs to be done for the core business, which is exactly what we're doing."
He added: "The main issues between us remains those of corporate governance and those discussions are ongoing."
BA hopes to see a £400m reduction in its fuel bill this year thanks to greatly lower oil costs, but trading conditions remain tough.
Source: Sky News UK
The carrier's nosedive into the red comes after record profits of £922m the previous year and reveals the impact of the fuel hikes and dampened demand amid the recession.
The airline suffered a near-£3bn fuel bill in last year's oil price bubble.
BA confirmed it is now offering staff unpaid leave and the option to go part-time, having already frozen pay and axed more than 2,500 roles since last summer to cut costs.
Management has also decided to forgo bonuses and the group is not offering any dividend payout to shareholders under a drive to offset BA's trading troubles.
BA said it had suffered in the "harshest trading environment we have ever faced", with revenues in the fourth quarter alone down 8.4% and pre-tax losses of £331m.
The global economic decline has hit the carrier's premium travel market and the airline has lost 13% of the market in the last six months of the year.
The group has been forced to offer cut-price discounts to keep non-premium travel broadly flat over the year.
Martin Broughton, chairman of BA, said: "In the last 12 months we have gone from a record profit to a record loss due to the current tough economic environment."
He added: "That only serves to underline the extremely difficult trading conditions that we are facing, despite our best ever operational performance, and any recovery is likely to take longer than initially envisaged."
The company warned there will be further job losses but declined to say how many of its 40,000 workforce would be affected.
It said talks with unions over changes to productivity and pay were progressing well in some areas but said discussions were going slowly in relation to ground staff and cabin crew.
"Today's numbers really are a comprehensive tale of woe, with almost every metric eligible for intensive care as BA heads deep into the perfect storm," said Richard Curr, head of dealing at CFD specialists Blue Index.
"Worryingly, BA's net debt position is soaring, and while the merger with Iberia should bring some stability and economies of scale, there is little else to look forward to in the near term."
BA admitted its merger plans with the Spanish airline were being held up by the internal trading issues faced by both groups.
Willie Walsh, chief executive of BA, said: "We're still in discussions - clearly those discussions have been ongoing for some time now.
"Iberia said they are focused on what needs to be done for the core business, which is exactly what we're doing."
He added: "The main issues between us remains those of corporate governance and those discussions are ongoing."
BA hopes to see a £400m reduction in its fuel bill this year thanks to greatly lower oil costs, but trading conditions remain tough.
Source: Sky News UK
