British Airways saw its earnings collapsed in the last quarter as a consequence of high oil prices, an economic slowdown and weak consumer confidence. Pre tax quarterly profit plunged by 88% to 47 million euros from around 380 million euros in the first quarter last year.
Chief Executive Willie Walsh said: “This is the worst trading environment the industry has ever faced.” He added: “British Airways is moving into a period of loss. It can do very little about it but to take out capacity and to increase the fares that consumers pay. So, it is not a good news story and there is a lot of problems to face ahead.”
BA said it is now spending over 10 million euros a day on fuel and plans to cut routes and raise fares.
On the possible all-share merger with Spanish carrier Iberia, Walsh said it was “too early to say what impact that will have on the business in terms of jobs.” Analysts have welcomed such a merger saying the consolidations and cost savings make it a sensible strategic move. Walsh called it “good news for both airlines, our shareholders and our customers.’‘