British Airways has posted record pre-tax losses of $244.75 million for the quarter ending June 30, its first quarterly loss since the company was privatized in 1987. Last year, the airline made a profit of $61 million over the same time frame.
However, its $155 million operating loss for the three months to the end of June was slightly ahead of forecasts, sending shares higher in early trading.
The spring first quarter is traditionally the airline’s strong quarter, capturing the start of the summer, but the airline is suffering with lower passenger numbers, particularly in business class.
Revenues dropped 12.2 percent in its first quarter to $3.27 billion, although the decline would have been 16.8 percent without a positive impact from exchange rates.
The airline has announced plans to reduce its capacity by 3.5 percent this summer to cope with the drop in demand. By winter 2010, BA expects to have grounded 22 aircraft from its fleet.
On Wednesday, the company announced that it would be scrapping all meals except breakfast on its short-haul flights in an effort to save $36 million. The company is also considering discontinuing chocolates and snacks for business-class passengers.
The airline has cut manpower by 1,450 since March 31 through reduced overtime, increased part-time working and targeted voluntary redundancy.
Thousands of BA staff have been asked to take pay cuts. Pilots have accepted a pay cut, but negotiations with cabin crew and ground staff continue. The failure to reach an agreement over plans to cut up to 3,700 jobs and freeze pay has left BA and unions locked in a 14-day cooling off period.