BA posts worst first-half results in its history

British Airways suffered a pre-tax loss of £292 million in the six months to the end of September.

The airline had posted £52m profits during the same period a year earlier.

Total revenue in the period was down 13.7 percent. Passenger revenue was down 13.6 percent, on capacity down 3 percent. Yields were down 12.2 percent, 18.2 percent excluding exchange, largely as a result of lower year on year surcharges and sales mix within cabin class.

British Airways’ chief executive Willie Walsh, said that aviation remains in recession. 

“We were quick to respond to the crisis by taking out excess capacity and, at the same time, driving down unit costs by 5.2 percent. This demonstrates how well our costs have been managed in the first half and it’s imperative we continue to deliver on our plans to reduce costs further in the second half. With revenue likely to be £1 billion lower this year, we can’t stand still and further cost reduction is essential.”

“We reduced summer schedule capacity by 3.5 percent, our costs are some £400 million lower and manpower has been cut by 1900 through reduced overtime, increased part time working and targeted voluntary redundancy. Total liquidity of some £4 billion puts us in a strong position.”

“The global airline industry is facing continued pressure on yields highlighting a significant shift within the industry. We will introduce further structural change in the second half to secure the long term future for our business. We are cutting winter capacity by six percent and making further manpower reductions of 3000 by March 2010 and permanent changes to the way we run our business.”

He added that premium leisure demand has been strong during the last six months and the airline is investing in new leisure destinations with six new routes starting this winter.

Financial position

“Our financial position is strong. Our liquidity position at the end of September was £2 billion,including £1,507 million of cash and some £460 million of general facilities. In addition we have £2 billion of committed aircraft facilities,” stated the airline.