Sat, May 22, 2010
Airline Still Says It Hopes To Break Even This Year
Struggling British Airways' financial woes are showing little
sign of easing, as the carrier posted a record pre-tax loss of $765
million over the past 12 months.
"This is our second consecutive year of record losses but we
take heart from the fact that, while our revenue has fallen by one
billion pounds, so have our costs," BA Chairman Martin Broughton
said in a statement Friday. Broughton said that, while revenue has
fallen by $1.4 billion, the airline has managed to reduce costs as
well, and that he expects that it would break even this year.
The international news service AFP reports that the airline
had been expected to lose $867 million this year, so the carrier
was performing better than had been anticipated. It has been
slashing costs, and has recently announced a merger with Spanish
airline Iberia in an effort to stem the red ink. The merger is
expected to be finalized later this year.
The airline has also cut about 9.4 percent of its total
workforce, or 3,800 jobs during the current fiscal year, and some
6,000 positions overall.
The airline is facing labor actions on the part of cabin crews
next week, which could add to its difficulties. British courts
upheld the Unite, The Union's right to stage a labor action
Like most airlines operating in Europe, BA was hurt by flight
cancellations due to the ash cloud caused by the eruption of
Iceland's Eyjafjoell volcano. However, the European Commission
agreed that national governments can compensate airlines for losses
incurred by that event.
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