Tuesday, February 9, 1999 Published at 08:20 GMT
Business: The Company File
British Airways makes a loss
British Airways: a cost-cutting programme has hit staff morale
Tough competition in the airline industry has pushed British Airways into the red. The company announced a rare quarterly loss of £75m ($122.4m).
However, the losses were smaller than most analysts' had predicted and BA says it would have still turned in a profit of £42m had it not been for a debt revaluation charge because of fluctuations in the Japanese currency, the yen.
The airline's chief executive, Robert Ayling, remains bullish about the future: "British Airways will emerge from the current difficult market conditions with lower costs and an aircraft fleet focused on the most profitable sections of the market."
He said the medium-to long-term prospects for the business were "very good indeed" and predicted that the £1bn cost-cutting drive known as the Business Efficiency Programme would eventually pay off.
It is this cost-cutting, though, that got BA into trouble in the first place. Staff morale is said to be low and a strike during 1997 hit business hard.
The £75m loss during the three months to December compares with an £80m profit the year before. It is the airline's first quarterly loss since 1995 and its first third-quarter loss since it was privatised in 1987.
For the first nine months of the financial year, BA reported pre-tax profits of £310m, down from 510m a year earlier.
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