BA cuts spending plans
London, July 4, 2009
British Airways (BA) said it had cut its spending plans by 20 per cent for the current year as it prepared for a lengthy industry downturn and reported that passenger numbers had fallen again.
The carrier said it had reduced its capital expenditure to GBP580 million ($951.9 million) for the year to the end of March next year, down from GBP725m, and pencilled in a similar number for the following year.
The spending cuts included the deferral of orders for 12 Airbus A380 aircraft for up to two years, according to a report in our sister publication, the Gulf Daily News.
"We have renegotiated a delivery schedule... the demand we expected in 2012 will now arrive later," BA head of investor relations George Stinnes said, adding that the firm still expected to have GBP1 billion in cash by March next year.
The carrier, currently locked in talks with trade unions in a desperate bid to wring cost cuts from staff, said it carried 3.8 per cent fewer passengers last month than in the same month last year, including a near 15 per cent fall in premium, or business, traffic.
The company said its long-running falls in traffic had stabilised in recent months, while Irish budget airline Ryanair reported its latest rise in numbers - up 13 per cent this month to 5.84 million. BA's load factor, a measure of how well it fills planes, was down 1.8 per cent at 79.6 per cent, while Ryanair's was up 1 per cent at 85 per cent. – TradeArabia News Service