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Further turbulence in the UK airline market is expected with news that first profits at British Airways fell by 92% with the company reporting very difficult trading conditions. Pre-tax profits for the first six months to September 30 fell to £52 million although there is also concern about the full-year impact. Record fuel prices and a constant reduction in travel numbers seems to have done the damage not only to British Airways but the industry as a whole.
Recent news from the likes of Ryanair and EasyJet has been broadly in line with the British Airways opinion on the markets, something which has been reflected in the relevant share price performances. Investors in the City have long been concerned about the strength of some company balance sheets and today’s announcement from British Airways will do nothing to allay fears.
However, on the upside British Airways chief executive Willie Walsh suggested that the fall in premium passenger numbers has so far been less than expected although he also conceded that the first six months of the company’s financial year had been amongst the worst on record. British Airways also suggested that full-year profits will be breakeven or a slight profit at best and while well down on last year’s profitability this is better than some analysts had forecast.
source: financialadvice.co.uk
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