British Airways reports first quarterly profit in over a year
05 Feb 2010
British Airways' massive cost-cutting campaign has thrown up desired results with the struggling carrier reporting its first quarterly operating profit in over a year. The airline however stressed that it still expected to report an annual loss even as an industry-wide slump continues.
The British flag carrier reported a marginal operating profit of £25 million, or $39 million, in the three months to 31 December, even as revenues slumped 12.9 per cent. The carrier is yet to see revenues from its hugely profitable first- and business-class service recover. This section of air travel business was almost immediately hit by global recession and the accompanied slump in air travel.
For the first nine months of the financial year, the airline reported a net loss of £245 million on revenues of £6.14 billion. This was almost double the £127 million loss reported a year earlier.
''These results highlight the impact of permanent changes across the company on our costs,'' said Willie Walsh, chief executive, British Airways. In a statement, he pointed out the airline had slashed operating expenses by 10.5 per cent over the past nine months.
Those cuts, Walsh said, along with sharp reductions in seat capacity, showed ''that we've adapted quickly to the new business realities created by the global recession.''
What Walsh's airline will take some time to adapt to, however, would be continued industrial action by its employees. The Unite union, which is Britain's biggest, is threatening to strike over changes to employees' contracts and a proposed two-year pay freeze.
