Turbulent times as BA plunges £164m into red

CABIN crew strikes and Iceland's volcanic ash cloud sent beleaguered British Airways £164m into the red for the three months to June 30.

The combination of the bitter industrial dispute with the Unite union and the closure of most of European airspace for almost a week in April cost the airline around 250m over the quarter.

Cabin crew have taken 22 days of strike action since March and further walkouts could take place from September.

Hide Ad
Hide Ad

But chief executive Willie Walsh said the airline had seen an improved operating performance and BA still expects to break even this year after two years of losses.

Mr Walsh played down fears of a "double-dip" recession, saying the airline was seeing a "steady recovery" and positive underlying trends in both cargo and passenger traffic.

At the operating level, losses of 72m were less than the 94m posted a year earlier, the chief executive added.

The impact of the disruption saw the airline's overall first-quarter revenues fall 2.3 per cent to 1.94bn. Passenger revenues were down 3.4 per cent after an 11.2 per cent slide in capacity.

Hide Ad
Hide Ad

But Mr Walsh also flagged up falling operating costs – helped by a lower fuel bill – and added: "Our focus must remain on cost control as we grow and continue our quest for permanent structural change across the business."

The group also received a boost this month when it was given US regulatory clearance for its alliance with American Airlines and Iberia on transatlantic flights, as well as agreeing a recovery plan with regulators for its pension scheme.

But BA is still facing the threat of further strikes after members of Unite rejected its "final" offer, raising the prospect of another ballot for industrial action.

Derek Simpson, joint leader of Unite, said he was sorry to see BA lose money and it had never been the union's intention to see the company struggle.

Hide Ad
Hide Ad

He again accused the carrier of imposing change on cabin crew without their agreement, insisting that the union had come within 10m of savings wanted by BA, which was a "drop in the ocean" compared with its losses.

Mr Simpson said cabin crew were concerned about a "fall" in standards at BA, with its reputation for providing a premier service "disappearing".

He said: "You have to question the direction and sense of the management, particularly its chief executive who wants to impose change in a bid to put up profits, without the support of staff."

Mr Walsh said he believed the "final" offer rejected by Unite members earlier this month still formed the basis of a resolution to the cabin crew dispute.

Hide Ad
Hide Ad

He said he was looking forward to meeting Unite at the conciliation service Acas next week but made it clear he was pressing ahead with contingency plans to deal with any further strikes.

"We continue to train volunteer cabin crew and that programme is going very well. I am looking forward to hearing what the trade union has to say in light of the poor turnout in the last ballot.

"I want to reach a resolution but we are preparing for further industrial action. I am confident we will operate 100 per cent of our long- haul services and we are looking at the short-haul programme."

Mr Walsh said the last deal put forward by BA was the "best and final offer" and "very fair".

Hide Ad
Hide Ad

Sir Richard Branson's airline Virgin Atlantic meanwhile announced that it made a big operating loss last year but that revenues and passenger numbers rose in the first part of this year.

Virgin's group pre-tax operating loss for the period March 2009 to February 2010 was 132m, compared with a profit of 60m for March 2008 to February 2009.

Revenues for 2009/10 decreased 8.6 per cent to 2.35bn but operating costs reduced 8 per cent. Airline revenue for the period March-May 2010 was up 10 per cent to 513m.

Busy weekend at Leeds Bradford

Budget airline Ryanair is celebrating good news from its venture at Leeds Bradford airport as it marks its busiest weekend for passengers.

Hide Ad
Hide Ad

Since opening a base at the airport in March, Ryanair has built up

services to and from 21 destinations in the summer months.

This weekend, 9,000 travellers are expected to pass through the airport on the way to or from its planes. That amounts to "huge success" for its vote of confidence in Leeds Bradford, the airline said.