British Airways Lost $175 Million

British Airways swung to a net loss of $175 million in the fiscal first quarter from a $44.6 million profit in the same period in 2008 and warned of tough trading conditions for cargo and passengers through the rest of the year.

Europe's third largest airline also recorded its first operating loss in the April-June period since it was privatized more than twenty years ago -- $155 million against a year earlier profit of $58 million.

Revenue shrunk 12.2 percent to $3.3 billion and excluding currency charges was down 16.8 percent.

"Trading conditions continue to be very challenging with … no visible signs of improvement," said BA chief executive Willie Walsh.

BA's cargo revenue slumped 28.1 percent in the quarter, but it performed better than close rivals Lufthansa Cargo and Air France-KLM which earlier reported freight revenues down 39.5 percent and 41.5 percent respectively.

Cargo volume, measured in cargo tonne kilometers, declined 11.5 percent. Yields sunk 18.8 percent, squeezed by lower levels of fuel surcharges as the oil price fell and by significant freight rate declines.

BA said it will ground 22 planes, nine percent of its fleet, in the winter season beginning October and delay new aircraft orders and the first deliveries of the Airbus A380 super jumbo.

The carrier said the pace of decline of passenger traffic stabilized during the quarter but numbers were "considerably" lower on last year.

Contact Bruce Barnard at brucebarnard47@hotmail.com.