British Airways has recorded its largest full year loss since its privatisation in 1987, but says that it aims to break even next year as the market for long haul premium travel recovers from the global financial crisis.
The airline’s net loss came in at £531m (A$923m) for the financial year ending March 31, much higher than last year’s loss of £401m (A$705m), although this was lower than analyst’s forecasts of losses of up to £590m (A$1,037m). Revenues for the year fell by 11 per cent to £7.9bn (A$13.9bn), although this was offset by a £1bn (A$1.76bn) reduction in costs.
Despite the loss, CEO Willie Walsh told reporters that the airline is aiming to break even during the current financial year. The airline will not be helped by a series of cabin crew strikes, which began again on May 24 after the Unite union won an appeal against an injunction won by BA, while it has also reportedly lost up to £100m (A$176m) as a result of the Icelandic volcano eruption.
Walsh added that the merger with Spanish flag carrier Iberia, which was signed in early April, will be completed by the end of the year. “The merger will create a new leading airline group known as International Airlines Group. Both airlines will retain their separate operations and individual brands. The group will generate enhanced customer benefits with a larger combined network and continued investment in new customer products and services. It will deliver annual synergies of €400m (A$601m) by year five.”
