Although the figure was towards the top end of analysts' estimates, BA's shares ended 3p down at 276p, reflecting anxieties about the trading climate, the dispute with Virgin and BA's inability to match passenger numbers to its expansion in capacity.
The results coincided with speculation that BA may be planning a rights issue to shore up its balance sheet - which Sir Colin Marshall, BA's new chairman, did little to dampen by saying he was 'mindful of the opportunities for capital-raising in the future'.
Sir Colin blamed the fall in profits for the three months ended December 1992 on difficult conditions in BA's main markets and warned that the timing of recovery in its all-important premium traffic remained uncertain.
BA also disclosed that the write-off following last October's acquisition of Dan-Air would be pounds 48m rather than the pounds 30m it calculated at the time.
More than half the pounds 80m fall in profits from the same period the previous year was due to sterling's weakness, which resulted in a sharp rise in operating expenditure on items such as landing fees, fuel and handling charges.
The eyes of the City were focused, however, on the continuing weakness of BA's markets as it prepares to introduce more aircraft to cater for a 13 per cent increase in capacity this summer.
Passenger traffic grew 8.6 per cent, but this was not enough to keep pace with the 11 per cent rise in seat capacity year-on-year in the third quarter, causing a 5.1 per cent fall in passenger yields. Demand for BA's important premium services - business and first-class travel - remained down on the same period in 1991/2.
Although Sir Colin said he expected further productivity improvements next financial year, BA said this did not imply heavy job losses. It aims to make savings of pounds 150m in the current year on top of the pounds 260m saved in 1991/2.
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