Troubled BA turns in first quarterly profit in over a year

British Airways' first quarterly operating profit in more than a year is fuelling tentative recovery hopes but the embattled airline still faces record annual losses.

BA suffered winter snow disruption and the threat of damaging strikes but yesterday was able to post a surplus of 25m in the three months to December 31 with the help of hefty cost cutting.

The figure was much better than expected, with consensus analyst forecasts pointing to a loss of 88m.

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Chief executive Willie Walsh said the results reflected “permanent change” to the business in what has been a devastating year for the airline industry; record losses were still on the cards, he said.

The firm continues to be haunted by the threat of strike action, with the union Unite re-balloting its 12,000 cabin crew members at BA for industrial action on a row over schedules.

Voting will close on February 22 and Unite will have to give seven days’ notice of any strikes.

Pre-tax losses narrowed to 50m in the third quarter, compared to forecasts of a 150m deficit, and the firm has racked up a 342m shortfall in the year so far.

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BA has seen costs fall by more than 10 per cent this year, helped by a near-20 per cent reduction in fuel outlay.

Nick Cunningham, of Evolution Securities, said the surprise profits from the airline signalled the start of “proper recovery” and Richard Hunter, head of UK equities at Hargreaves Lansdown, said the update was “something of a pleasant surprise”.

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