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BA's £50m loss beats expectations | BA's £50m loss beats expectations |
(about 1 hour later) | |
British Airways has announced it made a pre-tax loss of £50m ($79m) in the three months to December 2009. | British Airways has announced it made a pre-tax loss of £50m ($79m) in the three months to December 2009. |
This was down from the £122m it lost in the same period in 2008 and smaller than many analysts had expected. | This was down from the £122m it lost in the same period in 2008 and smaller than many analysts had expected. |
However, BA's pre-tax loss in the nine months to December rose to £342m from £70m in the same period in 2008. | However, BA's pre-tax loss in the nine months to December rose to £342m from £70m in the same period in 2008. |
BA is currently locked in a High Court battle with the union Unite over changes to cabin crew and is facing possible strike action. | |
Cost-cutting | Cost-cutting |
Analysts had predicted BA would announce a loss of £151m in the third quarter, taking its loss for the nine months to £443m. | Analysts had predicted BA would announce a loss of £151m in the third quarter, taking its loss for the nine months to £443m. |
FROM THE TODAY PROGRAMME More from Today programme | FROM THE TODAY PROGRAMME More from Today programme |
British Airways' chief executive Willie Walsh said the figures were representative of cost-cutting measures across the company. | |
"Operating costs are down by 10.5% and show that we've adapted quickly to the new businesses realities created by the global recession. | "Operating costs are down by 10.5% and show that we've adapted quickly to the new businesses realities created by the global recession. |
"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," he said in a statement. | "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," he said in a statement. |
Mr Walsh also said the company was working with staff, unions and trustees to address BA's £3.7bn pension funds' deficit, and said this involved "a range of changes to future pension benefits". | |
In November, the airline said the surplus in the older APS scheme had fallen to just £27m while the deficit in the larger NAPS scheme had risen sharply to £2.66bn. | |
The combined deficit in the two main BA pension schemes has ballooned by £1bn in just three months. | |
British Airways shares opened up 2.2% at 216p before falling to 212p in early trading. | British Airways shares opened up 2.2% at 216p before falling to 212p in early trading. |
Strike ballot | Strike ballot |
Howard Wheeldon, of BGC Partners, said there are still "manifold problems" for British Airways. | Howard Wheeldon, of BGC Partners, said there are still "manifold problems" for British Airways. |
BA should be shouting this from the rooftops, but it isn't Robert Peston, BBC business editor | BA should be shouting this from the rooftops, but it isn't Robert Peston, BBC business editor |
"Despite these figures being better-than-expected, the situation for BA that does remain very serious is its industrial relations problems," he said. | "Despite these figures being better-than-expected, the situation for BA that does remain very serious is its industrial relations problems," he said. |
BBC business editor Robert Peston said that the results were evidence that the worst was over for one of the biggest corporate victims of the recession in the UK. | BBC business editor Robert Peston said that the results were evidence that the worst was over for one of the biggest corporate victims of the recession in the UK. |
"For BA the volume of people travelling has stabilised which is extremely good news and the figures show they made a profit at an operating level for the first time in 15 months," he said. | "For BA the volume of people travelling has stabilised which is extremely good news and the figures show they made a profit at an operating level for the first time in 15 months," he said. |
"BA should be shouting this from the rooftops, but it isn't. It still faces industrial action and its pension deficit of nearly £4bn is huge," he added. | "BA should be shouting this from the rooftops, but it isn't. It still faces industrial action and its pension deficit of nearly £4bn is huge," he added. |
The airline avoided strike action over the Christmas and New Year period after winning a legal challenge against the Unite union. | The airline avoided strike action over the Christmas and New Year period after winning a legal challenge against the Unite union. |
Unite is re-balloting its 12,000 cabin crew members with the result due on 22 February. | Unite is re-balloting its 12,000 cabin crew members with the result due on 22 February. |