BA plunges to huge loss
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British Airways (BA) has announced its biggest loss since the company was privatised in 1987. According to a BBC report BA reported a pre-tax loss GBP401 million (US$632 million) for the fiscal year ending 31 March 2009, after seeing its results hit by a weak pound and higher fuel costs. The loss follows an annual profit GBP922 million in the previous fiscal year. The result was much worse than the GBP150 million loss BA forecast in January.
Although revenues increased to almost GBP9 billion, BA saw its fuel costs rise 44.5%. Its annual fuel costs totalled nearly GBP3 billion, the report stated. The weak pound contributed to the rising costs as BA buys its jet fuel in US dollars.
“The prolonged nature of the global downturn makes this the harshest trading environment we have ever faced and, with no immediate improvement visible, market conditions remain challenging,” BA’s Chief Executive, Willie Walsh, was reported saying.
The carrier plans to reduce capacity by 4% over the winter by parking up to 16 aircraft. It has also cut more than 2,500 jobs since last summer and added that it was in talks with unions about “pay and productivity changes”.
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