British Airways (BA) today reported a record loss of £401 million as high oil prices and falling passenger numbers took their toll on the flag carrier. The dramatic pre-tax loss for the year to March 31 follows a record £922 million profit last year. Willie Walsh, chief executive of BA, said: “The prolonged nature of the global downturn makes this the harshest trading environment we have ever faced.” He warned that there was no prospect of an immediate improvement.

BA shares fell 6 per cent or 9p to 154p in early trading this morning. The company also scrapped its dividend, which last year stood at 5p a share.

The airline said that it was cutting its capacity by 4 per cent next winter in response to the downturn and added that it was offering staff unpaid leave and part-time employment to cut its wage bill. The company also revealed that net debt has risen by £1.1 billion to £2.4 billion, as the weak pound translated to higher debt denominated in foreign currencies and the plummeting price of oil resulted in higher costs on its fuel hedging policy.

Read the full article in The Times.


This news just shows the folly of the government's 2003 "Future of Aviation" White Paper. The only reason to have a third runway at Heathrow would be to park BA's planes.

It's wrong, wrong, wrong.