British Airways blames weak economy for £70m loss

British Airways (BA) has made a loss of £70 million in the nine months to 31 December as a result of high fuel costs and the weak pound, compared to a pre-tax profit of £816 million a year ago.

A weak pound has meant that air traffic control and airport charges have become more expensive for the UK flag carrier. The airline said it plans to increase its sales activity in markets with stronger foreign currencies to benefit from exchange rates.

Willie Walsh, BA’s chief executive, said the economic downturn will mean the company will have to make cutbacks and said talks with trade unions over “pay and productivity” have commenced.

Soaring fuel costs in the first half of 2008 dented profits but BA said it will start to benefit from falling fuel prices in the 2009-10 financial year.

However, the company did report that while overall passenger numbers were down 4% from January 2008, it had experienced a 1.4% rise in “non-premium” traffic in January.

Last month, the International Air Transport Association (IATA) warned that 2009 is set to be one of the most difficult years for the airline industry.

The association is forecasting a global fall in passenger traffic of 3% and a fall in air cargo of 5% for the year ahead.

In 2008, the airline industry suffered as a result of record oil prices, which saw over 30 airlines go bust including XL Airways, the UK’s third-largest tour operator, ATA Airlines, Aloha Airgroup, EOS, Maxjet, Oasis, Silverjet and Skybus Airlines.

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