Profits lose their altitude at British Airways
After a torrid winter, British Airways (BA) has announced a drop in quarterly profits from £166m last year to £113m this time.
The announcement comes just a few days after BA reached an agreement with unions over pay, disputed pension rights and handling sickness issues, and narrowly averted an all-out strike by cabin crew.
The planned industrial action would have grounded BA flights – about 1,300 of them – from Heathrow and Gatwick and caused major disruption.
Because of this prospect many passengers cancelled their flights, losing BA valuable UK investment revenue in the process. BA estimated that it had directly lost about £80m because of the problems.
BA also said that severe fog before Christmas and the failure of the baggage system on two occasions in December at Terminal 4 at Heathrow had cost the company about £40m in the last quarter of 2006,a significant part of its UK investment.
Chief executive Willie Walsh said: “The patience and loyalty of our customers have been tested over Christmas. I wish to apologise for the inconvenience they have suffered during this period.”
BA said it was cutting its full-year revenue guidance to 3.25%-3.75% growth, compared to a 4.5%-5% forecast in November.