22/05/2009

BA Announces Record Losses Of £401m

British Airways has today posted a record loss of £401 million, marking the airline's worst result since the privatisation of the company in 1987.

The dramatic pre-loss tax for that year - brought about as a result of increasing oil prices and falling passenger numbers - comes just one year after BA announced a record £922m profit.

Last year the company was hit with a near - £3bn fuel bill.

Chief Executive of BA, Willie Walsh, said: "The prolonged nature of the global downturn makes this the harshest trading environment we have ever faced."

Shares in the airline fell 6.6% to 152p in early trading, forcing Mr Walsh to admit he saw "little if any" reason to be optimistic about prospects for the rest of the year.

The company also scrapped its dividend, which stood at 5p a share last year. The total number of passengers carried also fell 4.3% to 33.1m.

More than 2,500 jobs have been cut by BA since last summer and the carrier said it was in talks with unions about "pay and productivity changes".

Meanwhile, management will not take bonuses and BA will not offer any dividend payout to shareholders under a scheme to counteract any trading difficulties.

Recently, BA launched its first two-for-one offer to help fill planes, and further indicated fares would fall during the summer after admitting that a strategy of keeping up ticket prices was not compensating for a loss of passengers.

Chairman of BA, Martin Broughton said: "In the last 12 months we have gone from a record profit to a record loss due to the current tough economic environment.

"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."

(JM/BMcC)

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