BA losses hit record €609m

Beleaguered British Airways today posted record annual losses of £531m (€609m).

The airline – facing more strikes on Monday in a bitter dispute with trade union Unite – has been hit by recession, a harsh winter and a first wave of industrial action in March.

Today’s slide into the red is slightly less than the £600m (€688m) feared, but brings BA’s total losses for the past two years to £932m (€1.06bn) after a £401m (€459m) reverse the previous year.

British Airways said revenues plunged by £1bn (€1.14bn), although this was offset by falling fuel costs as well as savings elsewhere in the business.

Chief executive Willie Walsh also fired a broadside at unions after Unite yesterday won its appeal against their latest strikes being ruled out on a technicality.

“Returning the business to profitability requires permanent change across the company and it’s disappointing that our cabin crew union fails to recognise that,” he warned.

He added that the current financial year “could hardly have had a worse start” due to the disruption caused by Iceland’s volcanic eruption, which closed most of European airspace for almost a week in April.

Following yesterday’s court decision, 15 days of strikes are due to kick off on Monday.

But the group said market conditions were showing improvement and BA is expecting to break even this year following its heavy losses.

BA, which said the first wave of strikes cost it £43m (€49.3m), could face a £100m (€114m) bill from the next wave of action.

Mr Walsh told BBC Radio 4’s Today programme the firm had been able to provide “significant services” in the face of “unjustified industrial action”.

He said: “I can tell you that the vast majority of people in BA are very much on side and we cannot allow this business to be dragged down by a minority of people and that’s why we are taking the positions that we are.

“We’re doing everything we can to reach an agreement with Unite in the interests of securing a long-term future of the business.”

BA chairman Martin Broughton also urged the new Government to think again on its plans to shift aviation tax to a more onerous per-plane basis.

He said the sector should not be used as “a convenient source of public sector funding”.

He added: “The industry is vital to the UK economy and the travelling public as the airspace closure indicated yet we have a larger, and increasing, tax burden than other transport sectors.”