British Airways slumped to a record loss, nearly doubled its debt pile and cancelled its dividend, adding the tough conditions made it impossible to give any guidance for the current period.
Europe's third-biggest airline by revenue posted operating losses of Ł220 million ($347.5 million) on Friday, compared to a profit of Ł875 million in 2007/08.
It had earlier in the year forecast a loss of Ł150 million, not including restructuring costs of around Ł80 million.
“The revenue outlook continues to be weak during the current financial year... In light of this, the board is unable to recommend a dividend this year,” Chairman Martin Broughton said in a statement.
BA said it would continue cost-cutting, while flying capacity for next winter will be cut by 4%.
The British carrier's debt rose to Ł2.4 billion, from Ł1.3 billion the previous year, while its cash position slid Ł483 million to just under Ł1.4 billion.
Analysts and shareholders have been concerned about the group's pension deficit, which was valued at Ł1.5 billion at March last year but is likely to have grown substantially since then.
“If the financial markets deteriorate further, our pension deficit may increase, impacting balance sheet liabilities, which may in turn affect our ability to raise additional funds,” the company said in the statement.
A full actuarial review of the retirement scheme is currently underway, with the results expected to be published in late summer.
The pension deficit has been an issue during merger talks with Spanish partner Iberia, but the Madrid-based airline said last week it was more focused on its own performance than the tie-up discussions.
British Airways shares, up 14% this month, closed down 3.5% at 162.8 pence on Thursday, valuing the business at Ł1.9 billion.
Air France-KLM showed a glimmer of hope for the battered industry earlier this week when it posted a narrower than expected operating loss, also by squeezing costs. (Reuters)