British Airways remains in the red during holiday season (Roundup)

Nov 6, 2009, 11:22 GMT

   London - British Airways (BA) remained deeply in the red over the main summer holiday season when it incurred a record half- yearly pre-tax loss of 292 million pounds (485 million dollars), figures published Friday showed.

   The deficit followed a record annual loss of 401 million pounds for BA last year - its biggest since privatization in 1987. However, during the comparable six-month period between April and September last year, BA reported a profit of 52 million pounds.

   Soon after the latest figures were announced, the airline said it was planning to cut a further 1,200 jobs, taking to 4,900 the total number of positions that will be scrapped globally by March next year.

   BA chief executive told the BBC that there were still 'no green shoots of recovery' in the aviation industry which he said remained in recession.

   He said BA's talks for possible merger with Spanish carrier Iberia were 'going well' and a result was 'close.' He denied reports that BA would move its headquarters to Spain as part of the deal. BA has also been in talks with American Airlines (AA).

   In addition to costs - especially fuel charges - BA has been hit by intense competition from budget airlines and has been weighed down by a bitter fight with trade unions over cost-cutting that could lead to strike action before Christmas.

   Revenue was down by almost 14 per cent between April and September of this year. Walsh said he expected revenue to be down by 1 billion pounds down for the whole year.

   But he remained upbeat about the company's overall health, saying that costs had so far been cut by 400 million pounds while its overall financial position remained 'strong.'

   Operating costs were down by 8.7 per cent and fuel costs were by nearly 18 per cent lower than last year.

   But analysts said the half-yearly losses during the normally buoyant summer season were by about 40 million pounds higher than expected.

   Walsh, while dismissing reports about possible strike action as 'premature,' pledged to continue his cost-cutting drive.

   'We can't stand still and further cost-cutting is essential,' he said. But analysts warned that the 'weak results' presented by BA could strengthen the unions' resolve to fight major restructuring.

   BA, which has a total workforce of 38,700, had previously announced to cut staff levels by 3,700 by next March, of which 1,900 have already been lost through natural wastage, voluntary redundancies and reduced overtime.

   The latest cuts announced Friday mean that a further 3,000 jobs will disappear by March, 2010.