06/11/2001

BA announce first profit loss since privatisation

British Airways has announced profits of only £5 million for the second quarter of the financial year, representing a drop of 98 per cent on the figure for the same period last year.

The news follows only a day after the airline revealed a 25 per cent fall in traffic for the month of October, prompting speculation about the financial future of the company, currently Europe's largest airline.

While the dramatic fall in both figures can be attributed in part to the events of 11 September, the airline was already experiencing overcapacity in the run-up to the terrorist attacks, with over 7,000 jobs lost this year.

In addition, the forecast for the future could see BA's fortunes worsening to the tune of losses in the region of £750m by the end of the second quarter, and BA chairman Lord Marshall has acknowledged that they “anticipate a significant operating loss for the year".

The developments have prompted predictions that BA could be relegated from the FTSE index amid fears of continued poor economic performance from the airline. It is also thought likely that the company could be about to implement further job cuts. (CL)

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