Losses batter bruised BA

BA is attempting major reforms

British Airways has revealed the recent staff dispute over clocking-on has cost it between £30m and £40m ($49m-65m).

The dispute, which was resolved by the airline and unions on Wednesday, saw thousands of air passengers stranded at Heathrow after a wildcat strike.

BA unveiled the estimate as it announced a pre-tax loss of £45m for the April-to-June period.

The three months do not cover the period when the strikes took place, but do include a period when air traffic was hit by the Iraq war and the outbreak of the Sars virus.

'Terrible' disruption

The clocking-on row - which began when BA tried to impose a new swipecard system - led to unofficial strikes which cancelled 500 flights and left tens of thousands of passengers enduring days of chaos.

Those that survive in this business will be those that are prepared to change, adapt and modernise Rod Eddington, British Airways chief executive

The dispute was finally resolved on Wednesday evening after several days of negotiations between BA and the unions.

BA admitted that the strike had hit future bookings with the airline and would reduce revenue.

"Clearly the disruption at Heathrow two weekends ago was terrible for our customers, terrible for our staff and terrible for our business," BA chief executive Rod Eddington told BBC Radio 4's Today programme.

"We've got to rebuild our business, our relationship with our customers and restore trust where it broke down with our people."

Poor timing

He also said that with the benefit of hindsight it was "difficult to disagree" with the argument that the decision to press ahead with the new clocking-on system was wrong.

It's a lesson to other companies... value your employees Kevin Curran, GMB Union Read more about the agreement between BA and the unions

"The timing obviously wasn't good," he said.

"But when you're trying to change as many things as we are having to change at British Airways, we can't always have the flexibility on timing that we would like.

BA is currently implementing a massive restructuring programme - called Future Size and Shape - in an attempt to restore its fortunes.

The airline is cutting thousands of jobs and has reduced the number of flights it operates in response to the depressed economic climate and fierce competition from low-cost carriers.

Profit to loss

The £45m pre-tax loss in the three months to June compares with a profit of £65m in the same period last year.

Revenue fell 10.7% from last year to £1.8bn.

HAVE YOUR SAY The problems are a result of their union's 1970s view of democracy Kevin T, UK Send us your comments

BA blamed the impact of the Sars virus, the war in Iraq and ongoing global economic weakness for the loss.

But the deficit was smaller than had been expected by many analysts, with BA limiting the damage thanks to its ongoing cost-cutting programme.

"There was a minor disappointment at the yields but some joy from the cost reductions - it shows they (BA) can still keep chipping away (at costs)," said Rebecca Langley, aviation analyst at Dresdner Kleinwort Wasserstein.

"Management are doing all the right things," she added.

Mr Eddington insisted that BA was a viable business.

"We have no God given right to survive but... if you look at what we've done on the cost front we've done much more than any of the other carriers in Europe and that is the road to survival," he told the Today programme.

"Those that survive in this business will be those that are prepared to change, adapt and modernise."