British Airways Sees First Quarter Loss; Expands Operations

British Airways parent International Consolidated Airlines Group SA (IAG) said its first-quarter loss widened as fuel costs crimped margins, European economies slowed and pilots at its Iberia unit in Spain staged strikes, according to Businessweek.

IAG’s operating loss was $321 million, compared with a $132 million shortfall a year earlier, the London-based company said. Analysts had expected a loss of $310 million, on average, according to a Bloomberg survey.

Airline-industry profit will probably drop 62 percent to $3 billion this year, the International Air Transport Association estimates. BA suffered a $100 million quarterly loss and Iberia had a $220 million deficit, including $32 million from a pilot strike over reduced pay in Europe. IAG said it will do little better than break even in 2012 after the expense of buying Deutsche Lufthansa unit BMI.

Looking Ahead
British Airways is hoping to add more long-distance routes following the purchase of BMI, completed last month, which gives it more operating slots at Heathrow.

IAG recently announced the sale of BMI’s Regional arm to U.K. bidders, and efforts to offload discount unit BMIbaby are continuing, though some routes from Birmingham, East Midlands and Belfast City airports will close in June ahead of a possible shutdown in September.

The airline will also use the new takeoff and landing positions at Heathrow to open routes from Leeds-Bradford airport in northern England, Rotterdam in the Netherlands and Zagreb in Croatia, and is amenable to links with more U.K. and European airports provided they help feed its hub.

 

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