BA set to cut back on soaring costs

Feb 6 2009

British Airways said it lost £70 million in the first nine months of its financial year as it saw costs rocket to £7 billion.

The airline confirmed it was talking to staff unions about "pay and productivity" as it looks to slash soaring costs.

It reported a £1 billion increase in costs after it was hit by last year's record fuel prices and more recently the weakness of the pound.

BA's nine-month pre-tax loss of £70 million compared with a profit of £816 million a year ago.

BA warned last week that it expected to report full-year operating losses of around £150 million following the slump in sterling.

Fuel costs rose 50% to £2.2 billion and non-fuel by £335 million to £4.7 billion, hit by currency movements.

BA has already taken action to cut costs, shedding a third of its management team - 478 staff - at the end of last year.

It said there were not likely to be widespread job losses across its 42,000 workforce, but the group is leading a voluntary redundancy programme and is holding talks with unions about how to increase efficiency and cost savings.

It declined to reveal how many posts would be affected.

BA chief executive Willie Walsh said the results reflected the economic weakness and fall in sterling.