British Airways reports quarterly loss of £50m

British Airways today reported a smaller-than-expected quarterly loss of £50 million - but warned it still faced a record annual shortfall.

The airline said hefty cost cutting measures had helped improve performance in the three months to December 31. Analysts had expected the firm to post a much greater loss of £150 million in the period.



BA also reported its first operating profit for more than a year for the quarter.



Chief executive Willie Walsh said the results reflect "permanent change" to the business and said operating costs were down more than 10 per cent.







BA has yet to stem the fall in passenger numbers and today said these were down 8.7 per cent for the UK and Europe in January compared to a year earlier - declining steeply from the nine month fall of 4 per cent.

The freezing winter weather continued to take its toll, with heavy snowfall at the beginning of the month causing disruption in the UK and Europe.



The International Air Transport Association has said last year was the worst year on record for the industry.



In the nine months of the financial year so far BA passenger revenues were down 13 per cent, with a 3.9 per cent reduction in capacity.



Losses for the year so far have reached £342 million, from £70 million the previous year after BA posted a record deficit in first half trading - a normally buoyant period because it contains the holiday season.



BA said the better trading seen in the third quarter is likely to continue to the end of its financial year, with continued improvement in long haul routes.



Mr Walsh said: "While we are on the right track, we still expect to make record losses this year.



"Permanent structural change is being introduced in all areas and will return us to sustained profitability."



The airline has slashed staff numbers this year and is engaged in a potentially damaging battle with staff over strike threats.



BA only narrowly avoided crippling strike action over the Christmas period - but the threat of industrial action is expected to have had an impact on bookings as fliers sought alternatives over the festive period.



But union Unite is re-balloting its 12,000 cabin crew members at BA for industrial action on a row over schedules, with the result due on February 22.







Mr Walsh stressed that BA's focus would be on permanent cost reduction if the business is to be returned to profitability in the short term.

He said he was determined to press ahead with "permanent structural change" following a £300 million reduction in non-fuel costs last year.



He told the Press Association he did not believe the threatened 12-day strike by cabin crew over Christmas had any significant impact on the airline.



If the strike had gone ahead, it would have been "damaging", he admitted.



Mr Walsh said there were "ongoing discussions" between senior BA officials and Unite, but he was not directly involved.



"We are continuing to talk. We have made it clear we are prepared to talk. But challenges must be addressed by permanent structural change to our cost base."



Mr Walsh declined to discuss the airline's contingency plans in the event of a cabin crew strike, adding he was "pretty confident" employees were aware of BA's message to them.







Len McCluskey, assistant general secretary of Unite, denied suggestions that the two sides were close to resolving the cabin crew dispute.

But he said today's better-than-expected financial results could make it easier to get a deal and avoid industrial action.



"The climate is easier to try to examine all the problems. We have always accepted that the recession has hit British Airways. Our members have accepted that they need to make a contribution.



"We put forward £60 million-worth of savings months ago that could have avoided the controversy."



Mr McCluskey told BBC Radio 4's Today programme that Unite was not looking for a confrontation with the airline.

Have you tried new the Independent Digital Edition apps?
Travel
ebookHow to enjoy the perfect short break in 20 great cities
Independent Travel Videos
Independent Travel Videos
Simon Calder in Amsterdam
Independent Travel Videos
Simon Calder in Giverny
Independent Travel Videos
Simon Calder in St John's
Independent Travel Videos
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Travel

    Recruitment Genius: Web Developer - Junior / Mid Weight

    £15000 - £25000 per annum: Recruitment Genius: To support their continued grow...

    Recruitment Genius: Transportation Contracting Manager

    £33000 - £38000 per annum: Recruitment Genius: A global player and world leade...

    Recruitment Genius: Hotel and Spa Duty Manager

    £18000 - £24000 per annum: Recruitment Genius: If you are friendly, sociable, ...

    Recruitment Genius: Payroll and Benefits Co-ordinator

    £22300 per annum: Recruitment Genius: This museum group is looking for a Payro...

    Day In a Page

    Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

    Is this the future of flying?

    Battery-powered planes made of plastic, and without flight decks
    Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

    Isis are barbarians

    but the Caliphate is an ancient Muslim ideal
    The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

    Curse of Brink's Mat strikes again

    Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
    Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

    'The ministers talk to us about miracles'

    Why Greeks are cynical ahead of the bailout referendum
    Call of the wild: How science is learning to decode the way animals communicate

    Call of the wild

    How science is learning to decode the way animals communicate
    Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

    'The economic collapse has happened. What is at risk now is democracy...'

    If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
    The science of swearing: What lies behind the use of four-letter words?

    The science of swearing

    What lies behind the use of four-letter words?
    The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

    The Real Stories of Migrant Britain

    Clive fled from Zimbabwe - now it won’t have him back
    Africa on the menu: Three foodie friends want to popularise dishes from the continent

    Africa on the menu

    Three foodie friends want to popularise dishes from the hot new continent
    Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

    Who will fill Donna Karan's boots?

    The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
    10 best statement lightbulbs

    10 best statement lightbulbs

    Dare to bare with some out-of-the-ordinary illumination
    Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

    Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

    Briton pumped up for dream meeting with world No 1
    Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

    Nick Bollettieri's Wimbledon Files

    It's time for big John Isner to produce the goods to go with his thumping serve
    Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

    Dustin Brown

    Who is the German player that knocked Nadal out of Wimbeldon 2015?
    Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

    Damien Martyn: 'England are fired up again, just like in 2005...'

    Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test