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British Airways posts record $764.3m loss

London, May 21, 2010

British Airways on Friday posted a record 531 million pounds ($764.3 million) full-year loss, hit by strikes and winter snow. The airline's revenues for the year to the end of March fell 11 per cent to 7.9 billion pounds.

The second consecutive loss, the airline's largest annual deficit since it was privatized in 1987, follows last year's $575 million loss.

The British carrier however pointed out that its costs had come down by around 1 billion pounds and predicted a return to breakeven next year, helped by recovering business-class traffic.

'We think we can break even on the pretax profit level in the next full-year,' Chief Executive Willie Walsh told reporters on a conference call.

'Long-haul premium traffic has recovered and reductions in short-haul traffic have eased. Market conditions are showing improvement from the depressed levels in 2009/10.'

Shares in BA, which have dropped 17 percent in the last month, were 2.8 percent up at 191.5 pence by 0712 GMT, valuing the business at more than 2.2 billion pounds.

BA had been expected to report an average pretax loss of 590 million pounds, according to a Thomson Reuters I/B/E/S poll of 17 analysts.

The results were severely affected by cabin crew strikes in March, which BA said cost it around 45 million pounds and are expected to continue next week.

BA also said its merger with Spain's Iberia , which is expected to generate 400 million euros ($496.6 million) a year in cost savings, would be complete by the end of 2010.

It also said it hoped plans to form a commercial alliance with American Airlines would be approved by the US Department of Transportation and the EU by this summer.

BA said it made an operating loss of 145 million pounds in the fourth quarter -- down from 164 million in the same quarter a year ago.

Air France-KLM on Thursday predicted a return to breakeven this year after it posted a record full-year operating loss of 1.285 billion euros.-Reuters




Tags: British Airways | loss | Strikes |

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