BA suffers record annual loss, forecasts to break even

21st May 2010, Comments 0 comments

British Airways on Friday posted a record annual pre-tax loss of 531 million pounds (609 million euros, 765 million dollars) as sales slumped but forecast it would break even this year.

BA, which faces a cabin crew strike next week, said its net loss widened to 425 million pounds in the 12 months to March from 358 million pounds in the previous year. Revenues tumbled 11.1 percent to 7.99 billion pounds.

"This is our second consecutive year of record losses but we take heart from the fact that, while our revenue has fallen by one billion pounds, so have our costs," Chairman Martin Broughton said in a statement.

Market expectations had been for a larger pre-tax loss of 600 million pounds after the group had a shortfall of 401 million pounds in the previous 2008/2009 financial year.

The airline, which is slashing costs and merging with Spanish rival Iberia in a bid to return to profitability, has been hammered by the global economic downturn which hurt demand for air travel.

BA said Friday that it cut almost 3,800 jobs, or about 9.4 percent of its total workforce, during the 2009/2010 financial year. Since September 2008, it has axed more than 6,000 positions in total.

British Airways said it was aiming to break even in the current 2010/2011 financial year.

"Market conditions are showing improvement from the depressed levels in 2009/10," the company said.

"Cargo is showing significant signs of improvement. Passenger revenue is recovering, with increased corporate activity, particularly across the Atlantic.

"On the basis of these market improvements, we are targeting revenue growth of some 6.0 percent and breakeven at the profit before tax level."

BA cabin crew plan to go ahead with a five-day strike next week after a court upheld their right to stage the action on Thursday, according to officials at the Unite trade union.

The strike is set to begin Monday. Two further five-day strikes, starting on May 30 and June 5, will also go ahead if the dispute is not settled.

© 2010 AFP

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