BA losses hundreds of millions in second quarter

The Nashville News.Net
Saturday 31st July, 2010

British Airways has announced a second quarter pre-tax loss for 2010 following financial pressure brought to bear on the airline by several cabin crew strikes and the disruption caused by the ash cloud from Iceland.

In the April to June period BA lost £164 million, which is larger than the £148 million it lost in the second quarter of 2009, despite total costs decreasing 3.3%. This was due to a number of factors.

Chief among them was a revenue decline of 2.3%, which, coupled with the £250 million cost of the ash cloud disruptions and the £191 million cost of the cabin crew strikes, entirely crippled the airlines ability to turn a profit or even breakeven.

Willie Walsh, CEO of the airline, remains optimistic though.

“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,” he said Friday.

British Airways has pointed out that passenger revenue would have increased 11% had there not been the extensive disruption throughout the first two quarters of the year. Cargo related operations saw increases in revenue of 36% during the same period.

BA’s main rival, Virgin Atlantic, suffered losses of £132 million between February of 2009 and 2010, but reported an increasing share of the market throughout the first half of 2010 with overall revenues rising 10%.

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