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British Airways issued a warning that the operating loss for its fiscal year ended 31 March is likely to be larger than expected due to additional layoffs, and that the continued decline in traffic and yields will mean a further drop in revenue.
The airline is now saying that the loss for the year is likely to be £150 million, which is in line with the earlier outlook, but doesn’t include £75 million in severance costs. BA has continued to offer voluntary layoffs in its attempt to reduce operating costs as the financial crisis affects the airline industry world-wide. In October of last year, approximately 450 of the carrier’s 1,350 managers eligible to apply for voluntary redundancy chose to take up the offer. Last Friday, the airline said that another 300 management staff would leave under the voluntary programme at the end of May.
The continued pressure on passenger numbers and yields, especially on US services, will mean £20-25 million less in revenue, the carrier said.
British Airways has reported declining passenger traffic for 13 consecutive months. In March, the airline carried 2.6 million passengers, which was an 8.2 per cent decrease from the same month last year. The drop in premium traffic was 13 per cent, while non-premium traffic saw a fall of six per cent, as compared with March of 2008, according to BA.
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