British Airways losses triple

BRITISH Airways, Europe’s biggest airline, said its fourth-quarter loss tripled as passenger traffic fell because of an economic slowdown, the war in Iraq and the outbreak of severe acute respiratory syndrome.

The shares fell as much as 6.5% after chief executive Rod Eddington said first-quarter revenue will decline from a year earlier. “Our priority now is to get people back into the habit of flying,” he said.

British Airways is using fare discounts of as much as 60% to jump-start demand in the worst industry slump ever.

The carrier is accelerating a 23% cut in its workforce and grounding planes including its Concorde fleet to lower costs.

The net loss in the three months ended March 31 widened to £133 million, or 12.4p a share, from £43m, or 4p, a year earlier. Sales fell 14% to £1.68 billion. Passenger traffic dropped 7.1%.

The world’s airlines will lose $10bn this year because of SARS and the conflict in Iraq, according to figures from the International Air Transport Association.

Deutsche Lufthansa AG, Europe’s No. 3 carrier, said last week its quarterly loss almost doubled to €356m as average revenue per passenger fell 12.5%.

Air France SA, Europe’s second-largest airline, reported a fourth-quarter loss of €98m as yield dropped 2.3%.

British Airways’ yield, or average revenue per passenger, dropped about 7.5% in the fourth-quarter, Mr Eddington said.

British Airways was expected to post a fourth-quarter net loss of £174m, based on the median estimate of five analysts surveyed by Bloomberg News. Sales were expected to fall 10% to £1.75bn.