BA and M&S to confirm gloom

The new M&S chairman, left, with chief exec Peter Salsbury

Two of the UK's corporate giants, British Airways and Marks and Spencer, are to outline the depth of their recent troubles on Tuesday.

Both companies have suffered falls in profits, prestige and patronage in recent years.

Those declines have led to the two blue chip companies bringing in fresh blood - one Australian, one Belgian - to try and restore their former glory.

BA used to claim the title of the world's favourite airline, while Marks and Spencer was for decades the leading force on the UK's high streets.

BA is expected to confirm that it has made a loss in the past year, its worst showing since it was privatised in the 1980s.

BA is hoping to have turned the corner

Marks and Spencer, while still profitable, is expected to cut the dividend it pays to its army of shareholders for the first time.

With the markets well prepared for bad news, analysts will be looking for confirmation that BA has started turning the corner.

Analysts will be keen to hear how the new chief executive, Rod Eddington, intends to implement the cost-cutting and downsizing strategy laid out by his predecessor Bob Ayling, who stepped down in March after a troubled four-year tenure.

Marks and Spencer plans

Overcapacity on the North Atlantic, fierce competition from low-cost airlines in Europe and high fuel prices are expected to push BA's results into the red for the year to 31 March.

The expected loss would compare with a pre-tax profit for the year before of £225m.

Investors will be wanting confirmation that yields - the average price paid by a passenger to be flown one kilometre - are improving, thanks to its move to focus more on premium passengers.

BA reported a 3.2% increase in yields for the third quarter - its first in seven quarters.

Each 1% improvement in yields for BA over a full year is worth about £70m-£80m in terms of profit to BA, say industry watchers.

Revival strategies?

All eyes will be on the new boss, formerly at the helm of Ansett Australia, although he is unlikely to be able to outline a detailed shift in strategy just three weeks into the job.

There has been some speculation that he may want to speed up BA's restructuring programme, which analysts say could lead to a 10% workforce reduction by 2003.

The new M&S chairman, Luc Vandevelde, who was formerly with French supermarket chain Promodes, is thought to be keen on cutting the dividend it pays to shareholders for the first time in its history.

After three months in the job he is expected to be in a position to outline his detailed revival strategy for M&S.