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British Airways makes £148m loss British Airways makes £148m loss
(10 minutes later)
British Airways has reported a pre-tax loss of £148m in the three months to the end of June. British Airways has reported a pre-tax loss of £148m ($245m) in the three months to the end of June.
This compares with a profit of £37m in the same period last year. Its operating loss of £94m compares with a profit of £35m last year.This compares with a profit of £37m in the same period last year. Its operating loss of £94m compares with a profit of £35m last year.
Its losses come in the middle of a tough year for airlines as passengers cut back spending in the recession.Its losses come in the middle of a tough year for airlines as passengers cut back spending in the recession.
"Trading conditions continue to be very challenging," Willie Walsh, the airline's chief executive said.
"While traffic volumes are down considerably compared to last year, they have stabilised during the quarter and show some signs of improvement for the peak summer months," he added.
Staff cuts
British Airways has had to deal with falling traffic numbers and possible industrial action.British Airways has had to deal with falling traffic numbers and possible industrial action.
"Trading conditions continue to be very challenging with underlying revenue down 16.8% and no visible signs of improvement. BA has faced possible industrial action over its efforts to cut costs and staffing numbers. The chief executive has previously said that its drive to save cash was part of a "fight for survival". In June, he asked thousands of staff to work for free for up to one month to keep the airline in business.
"While traffic volumes are down considerably compared to last year, they have stabilised during the quarter and show some signs of improvement for the peak summer months," Willie Walsh, British Airways' chief executive said. The airline has reduced manpower by 1,450 since March 31, 2009 through "reduced overtime, increased part time working and targeted voluntary redundancy," he said.
Earlier this month, the airline said it planned to raise more than £600m to help it weather the recession. A "permanent structural change" to its employee cost base "is essential to our short-term survival and long term viability", Mr Walsh said.
The airline should meet its cost cutting targets, he said.
"Our engineers and pilots have voted for permanent change. This is a great step forward. Talks with other union groups continue. We're cutting forecast capital expenditure by 20% this year from £725m to £580m, and it's likely to remain at the same level this year," he added.