British Airways suffers steep revenue loss

London: Repeated strike action by cabin staff and the impact of the Icelandic volcanic cloud have contributed to a steep first quarter loss of £164 million (Dh940 million) at British Airways, the company said yesterday.

But despite the pre-tax loss between April and June, BA chief Willie Walsh remained upbeat, saying he believed the airline was on course to break even over the whole of the financial year which ends on Dec-ember 31.

The combination of cabin crew strikes in March and April and the temporary closure of European airspace in April had cost the airline around £250 million in the first quarter of its financial year, BA said.

BA's rival, Virgin Atlantic, yesterday reported an annual pre-tax operating loss of £132 million between March 2009 and February 2010.

The previous year, Virgin made an operating profit of £60 million.

However, the airline, which is in fierce competition with BA on long-haul routes, said both revenue and passenger numbers were up between March and May of this year.

Recovery

Walsh said the airline had seen a "steady recovery" and positive underlying trends in both passenger and cargo traffic as operating costs declined — not least due to the fall in the fuel price.

At the operating level, losses of £72 million were less than half the £148 million posted a year earlier, said Walsh. "While some economic experts are flagging the risk of a ‘double dip' recession, the steady recovery continues and, on that basis, we continue to target to break even at a profit before tax level for the full year," Walsh said.

BA's share price rose yesterday by around 3 per cent on the London stock market to 220.3 pence.

The airline received a boost earlier this month when it was given regulatory clearance for its alliance with American Airlines and Spain's Iberia.

Turbulent quarter