Poor 1st Quarter Results Mean Cuts In Service, Jobs Are Coming

The first quarter of 2009 was difficult for British Airways, as the carrier reported a pre-tax loss of about $250 million. "Trading conditions continue to be very challenging with underlying revenue down 16.8% and no visible signs of improvement," said BA CEO Willie Walsh. But there was a small bright spot on the horizon. "While traffic volumes are down considerably compared to last year, they have stabilized during the quarter and show some signs of improvement for the peak summer months," he told Air and Business Travel News.

Walsh said 22 aircraft will be grounded during the winter months, and flights to JFK, Newark, and other airports will be curtailed. The airline will also push back delivery of its first A380 by five months, and the second will be delayed two years. An additional 3,700 positions will also be cut, bringing the total equivalent job reductions to 6,200 since June of last year.  Some of that figure has been achieved through reduced overtime, increased part-time working and voluntary redundancy.

On the BA Investor Relations website, the company reports that some 7,000 British Airways employees have volunteered for programs in support of the airline’s cost reduction plan. Their actions will save the company almost $17 million.

While passenger volume is likely to increase during the summer, "(t)he industry continues to face very difficult trading conditions, with considerable uncertainty over the likely timeframe of the recovery from the global economic downturn," BA said in a statement.

FMI: www.britishairways.com