British Airways profits take a hit in a "challenging year"

19 May 2007

With Britain's Office of Fair Trading and the US Department of Justice investigating the airline over alleged price fixing, the venerable carrier has also thought it prudent to make a provision of 350 million pounds (512 million euros, 690 million dollars), it said.

BA has also announced that it had ordered eight new Airbus A320 family aircraft, at a total list price of $528 million (391 million euros) which will be due for delivery in the period 2008-2010.

Overall, the group's net profit fell by 35.7 per cent on a 12-month comparison, to 290 million pounds in the year to March 31, an annual earnings release said.

The fourth-quarter net loss of 128 million pounds, compares to a net profit of 80 million pounds a year earlier. The loss has also resulted from cancellations of about 1,200 flights earlier in 2007 when cabin crew threatened to strike over working conditions.

Though the airline's share price took a hit of more than 4.0 per cent in response to the announcement, BA chief executive Willie Walsh struck a positive note. "These are strong results despite a challenging year," he said in comments accompanying the release.

"We know at times it has been a frustrating year for our customers, caused by disruption and overly restrictive UK government security measures on hand baggage," he added. The foiling of an alleged British terror plot last August cost the company about 100 million pounds, as increased security at airports affected flights.