British Airways Plc fell to a worse than expected first-half loss and forecast revenue would slump by 1 billion pounds this year, but analysts said the worst could be over as the airline signaled business was stabilizing.
BA, whose alliance with American Airlines is being scrutinized by European and US competition watchdogs, on Friday reported a pretax loss for the six months to end-September of Ł292 million ($482.4 million), while revenues fell 13.7% to 4.1 billion.
The airline, which has reduced operating costs by 8.7% by cutting free meals on some flights among other measures, said it would slash more costs, with another 1,200 staff losing their jobs next year taking the total number of job losses to 4,900.
“Our revenues are likely to be about 1 billion pounds lower this year so we're determined to reduce costs further to ensure we return to acceptable levels of profitability,” Chief Executive Willie Walsh told reporters on a conference call, adding that BA was "riding along the bottom" of the downturn.
BA reported better traffic data, with all-important business class traffic down 1.4% in October year-on-year, a vast improvement on September's 7.9 decline.
Evolution analyst Nick Cunningham called the results “weak but not disastrous.”
The airline's loss - impacted by higher debt levels, lower interest rates, a higher pension burden and restructuring costs - compares with a first-half pretax profit of 52 million last year and expectations for a loss of between 235 million and 255 million in a Reuters poll of six analysts. (Reuters)