Loss for British Airways

Loss for British Airways

LONDON - British Airways on Thursday posted a pre-tax loss of ?45 million ($72.9 million) in the three months to June 30, from a profit of $105.3 million in the year-earlier quarter.

Europe's biggest airline said its operating profit crashed from $256 million to $64.8 million, its worst first-quarter performance, as it struggled with a stagnant global economy, and the effects of the war in Iraq and the outbreak of the SARS virus.

Traffic volume rose by 1.7 percent due mainly to discounting but a 12.7 percent year-on-year slump in yields, or average fares, trimmed revenues by 10.7 per cent to $2.96 billion." This is the most testing period in aviation history," said chief executive Rod Eddington.

Cargo volume slipped to 190,000 tons from 192,000 tons a year ago and a 11.1 percent decline in yields squeezed revenues from $204 million to $183 million.

Eddington said a 24-hour wildcat strike at BA's London Heathrow hub on July 18 cost between $48 million and $65 million and the uncertainty created among customers would cut revenues in the current three months from July to September, traditionally its strongest quarter.

The airline said it is on track to cut 13,000 jobs after previous voluntary lay-offs off 11,227 employees since August 2001. It has achieved just over $1 billion in annualized cost savings against a March 2004 target of $1.05 billion.