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British Airways Q1 loss widens, sees FY break even

British Airways Q1 loss widens, sees FY break even
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First Published: Fri, Jul 30 2010. 01 21 PM IST
Updated: Fri, Jul 30 2010. 01 21 PM IST
London: British Airways’ first quarter losses widened after it was hit by the impact of volcanic ash and strike-related disruption, though it expects to shrug off its troubles and break even in the full year.
The British carrier’s pretax loss grew 10.8% to £164 million ($256.4 million) for the three months to the end of June, while revenues fell 2.3% to £1.93 billion.
However, BA’s yields - the revenue it makes on each passenger for every mile travelled - rose 12.7% as costs fell and it maintained previous full-year guidance.
”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,” BA’s Chief Executive Willie Walsh said in a statement.
The Unite union, which represents BA cabin crew, has been embroiled in a long running dispute with the airline, which has resulted in a series of strikes costing BA £150 million.
It was also hit by the spread of ash from an erupting volcano in Iceland, which grounded much of Europe’s air traffic for a week in April, and cost the airline around £100 million.
BA, whose merger with Spain’s Iberia was unconditionally cleared by the European Commission earlier this month, said passenger revenue fell 3.4% in the period but that without any disruption it would have jumped 11%.
Shares in BA, which have risen 5% in the last month, closed at 216 pence on Thursday, valuing the business at around £2.5 billion.
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First Published: Fri, Jul 30 2010. 01 21 PM IST