Profits slump hits BA

Click to follow
The Independent Online

British Airways today said it had made half-year pre-tax profits of £60 million against £310 million in the same period last year.

The airline said operating profits in the six months to September 30 were £235 million compared with £406 million previously.

BA also announced today that its chairman, Lord Marshall, would retire at the company's annual meeting in July next year.

The airline said the results showed that its recovery programme and other initiatives were helping to offset a continued deterioration in revenues. They came despite what BA called a "difficult quarter", which it said included unofficial industrial action at Heathrow.

BA's chief executive, Rod Eddington, said the group had made good progress in taking costs out of the business and had delivered £701 million of annualised savings against a target of £650 million.

He said it was on course to reach its target of reducing jobs by 13,000 by March 2004.

However, Mr Eddington said the company "must do more to remove costs".

"We will continue to simplify and modernise our business while enhancing the customer experience with improved service and better air fares," he said.

Lord Marshall said trading patterns during the last few months pointed to a more stable outlook for revenues.

But he said recent positive news from the United States, such as the fastest growth in gross domestic product for nearly 20 years, had yet to show in forward bookings.

"Continued delivery of business efficiency and cost improvement is core to improving profitability," he said.