BA blames ash cloud and strikes for steep quarterly loss

AP - British Airways PLC on Friday said its losses widened 15 percent to 122 million pounds ($190 million) in the three months ending June 30 as operations were disrupted by cabin crew strikes and a cloud of volcanic ash from Iceland.

However, the airline said that underlying revenue increased and it achieved further cost reductions. Chief Executive Willie Walsh said he still expected the carrier to break even for the full year.

For the three months, BA said revenue of 1.94 billion pounds was 2.3 percent less than in the same period a year ago. Without the disruptions, BA said passenger revenue would have been up by 11 percent compared to a year earlier.

The net loss compared to a loss of 106 million pounds a year ago.
“The trends in our passenger and cargo traffic continue to be positive with yields up and costs down,” said Walsh.

“Together this led to a reduced operating loss for the period though pretax losses increased as a result of additional finance costs and the impact of non-cash foreign exchange movements.”

BA was hit by 23 days of strikes by cabin crew in May and June and suffered a major interruption of operations in April due to the volcanic ash cloud from Iceland. Cabin crew have voted down BA’s latest contract offer, and may call further strikes.

The airline had previously reported that first-quarter traffic was down 14.9 percent compared to a year earlier and capacity was down 11.3 percent.

The first quarter loss follows a record annual loss of 425 million pounds ($665 million) for 2009-10.