Friday, 7 November 2008

British Airways profits plunge after bleakest period

British Airways announced a 92-percent plunge in half-year profits on Friday following "incredibly difficult trading conditions" and high fue
l prices.

Pre-tax profits dived to 52 million pounds (64 million euros, 82 million dollars) from 616 million during the same six-month period a year earlier.

The airline recorded a net loss of 42 million pounds (53 million euros, 66 million dollars) for the six months to the end of September and said passenger numbers were down by almost four percent.

"This is a good performance given the incredibly difficult trading conditions. The six-month period will be remembered as the bleakest on record," BA chief executive Willie Walsh said in a statement.

"The period was hit by a crisis in the banking sector, record fuel prices and several airlines going out of business."

However, BA said it was confident it would make a "small profit" for its 2008-09 financial year even though fuel costs were expected to total about three billion pounds.

While oil prices have fallen sharply in recent weeks, BA said this benefit was being offset by exchange rate movements.

Revenues for the six months to September 30 were up 6.4 percent, despite a weakening in long-haul premium traffic since the summer, the airline said.

Operating profits, which exclude interest payments and taxation, fell to 140 million pounds from 567 million pounds a year earlier.

The airline was also hit by the chaotic opening of the new Terminal Five at London's Heathrow airport, but Walsh said the terminal was now running smoothly.

Source: EconomicTimes

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