21 May 2010
British Airways has revealed that it made a record pre-tax loss in the last financial year of 531 million pounds. The results reflect the impact on BA of the recession and industrial action by airline staff.
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These are easily the worst results in the history of British Airways since it was privatised in 1987. The airline has suffered from the downturn in the global economy with passengers abandoning business class travel. The figures don't include the fall out from the volcanic ash crisis which has cost British Airways around 40 million pounds because the results only run up to March. But they do include losses incurred from the first round of strikes that month.
With a further 15 days of strikes due to start on Monday, British Airways stands to lose another 100 million pounds. The airline's chief executive, Willie Walsh, revealed that he had met the leaders of the Unite union in the last week to try to resolve the dispute. He also defended his strategy of going to the High Court to try to prevent the strike from happening.
"I will look at every option, examine every avenue that is available to us to try and protect our customers and protect our business against the actions of a dysfunctional union who clearly are out of touch with reality and reality is best demonstrated by the financial results that we've released today."
If there are any crumbs of comfort for BA and its investors, it's the fact that the results were actually better than most analysts had anticipated and the airline also says that market conditions are showing an improvement.
Nick Cosgrove, BBC News
Click to hear the vocabulary:
changed from being state or government owned and controlled to being owned by private individuals or companies
- the downturn in the global economy
the economic slowdown that is affecting a lot of countries around the world
- abandoning business class travel
not wanting to buy expensive tickets to fly in business class (but choosing the cheaper option of travelling economy class)
- fall out from the volcanic ash crisis
negative financial effects of the recent ash cloud from a volcano which disrupted air travel to and from the UK
- losses incurred
money lost in a business venture
when workers don't go to work as a protest about their working conditions
- to resolve the dispute
to find a solution to the problem (here, between management and the workers)
- a dysfunctional union
a group that doesn't work well effectively or well. Here, 'union' is a legally recognised organization that represents the people who work in a particular industry, protecting their rights, and discussing their pay and working conditions with employers
- crumbs of comfort
small positive signs
- market conditions
the factors that influence the way financial products operate