Newspaper article The Evening Standard (London, England)

HARD-UP BRITISH AIRWAYS GROUNDS 22 JETS; ROUTES CUT AFTER RECORD LOSSES; BA Chief: We Must Cut More to Survive

Newspaper article The Evening Standard (London, England)

HARD-UP BRITISH AIRWAYS GROUNDS 22 JETS; ROUTES CUT AFTER RECORD LOSSES; BA Chief: We Must Cut More to Survive

Article excerpt

Byline: Jonathan Prynn Consumer Business Editor

BRITISH AIRWAYS has been forced to ground 22 of its biggest planes and slash seven routes as it slumped to its first peak-season loss.

The airline dropped [pounds sterling]148 million into the red during the key April to June quarter when it would normally expect to make a thumping profit. Even last year, when the economy started to fall into recession, BA was [pounds sterling]37 million in the black in the same period.

BA, which this week axed free meals for economy passengers on European flights and culled canapes in business class, said it was still being buffeted by "very challenging" trading conditions with "no visible signs of improvement".

Chief executive Willie Walsh said bookings are slightly higher over the summer but that tickets were being sold at lower prices, wiping out the benefit.

He said: "The industry continues to face very difficult trading conditions, with considerable uncertainty over the likely timeframe of the recovery from the global economic downturn."

The carrier will ground 22 of its long-haul aircraft -- Boeing 747s and 757s -- this winter, taking about 8,000 seats out of service. Overall capacity is being cut by 3.5 per cent. The airline has also axed seven routes from Gatwick: JFK New York, Alicante, Barcelona, Krakow, Madrid, Malta and Palma.

The company has never made a loss in the first or second quarters of its financial year since it was privatised in 1987. Over the whole year revenues are likely to be down [pounds sterling]1 billion on last year, warned finance director Keith Williams.

In a clear warning to staff, Mr Walsh said: "Our work to reduce costs, which started last October, is beginning to bear fruit as they are down 6.6 per cent. But with revenue still weak, there is much more to be done."

Mr Walsh has said the company faces a fight for survival without deep job cuts and changes to working practices. …

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