BA profits slide but beat expectations

Print Article E-Mail Article

BA has announced a fall in pre-tax profits for the second quarter, but said revenues had now stabilised.

British Airways (BA) today announced a fall in pre-tax profits for the second quarter, traditionally its strongest, from £245m ($414m) to £105m ($177m), but the group said revenues had now stabilised after the Iraq war and the SARS outbreak.

BA chief executive Rod Eddington said: "We think we have seen the bottom." But he warned that economic recovery in the US had not yet shown up in forward bookings.

Pre-tax profits for the six months from April to September have fallen 80% to £60m ($101m) and analysts are predicting that the airline will post a loss for the year. Eddington said that further cost-cutting would be necessary, even though BA has shed almost 13,000 jobs and cut costs of £701m ($1.1bn) since early 2001.

In related news, BA chairman Lord Marshall announced he would retire next July. He will be replaced by British-American Tobacco executive chairman Martin Broughton.