It was close to midnight when Willie Walsh finally emerged from Waterside, British Airways' sprawling Heathrow headquarters. The airline's chief executive blinked in the lights of the waiting television crews, cleared his throat, and started to speak, his voice trembling.

"I am sorry to say that despite our efforts today we have been unable to secure further funding from our banks. The cash drain we sustained as a result of the rolling programme of industrial action by cabin crew and ground staff means we can no longer continue as a going concern. British Airways has this evening been put into administration."

This may seem a far-fetched scenario, but not according to Walsh's own doom-laden forecasts. BA is in trouble, with recession and the banking crisis – banks accounted for nearly 40% of BA's business-class traffic – pushing it to its worst-ever loss in the financial year that ended in March. In recent weeks Walsh has issued dire warnings to staff, saying that almost all the business is unprofitable, the current awful trading situation will only get worse and that the company faces "a fight for survival".

Last week he went farther, inviting all employees to work for a month without pay – following the example set by himself and Keith Williams, the finance director. Staff have even been asked to drum up business by selling tickets to friends and family under the company's "Hotline" scheme, with special cheap fares being made available last week.

Read the full article in The Sunday Times.


BA's current situation shows just how unnecessary Heathrow expansion is. Willie Walsh can't utilise existing capacity, let alone a third runway.

But perhaps the government thinks that flying BA staffers' friends and family around the world on cheap fares is a good idea?