BRITISH Airways today announced a big dip in first-quarter pre-tax profits, blaming the "worst trading environment" the aviation industry had ever faced.
BA also announced it was cutting capacity on its winter schedule by 3.1% as its fuel costs soared 49%.
BA's pre-tax profit for the period April-June 2008 was £37 million against £298 million for the same period last year.
BA chief executive Wil
lie Walsh said: "We are in the worst trading environment the industry has ever faced.
"The combination of unprecedented oil prices, economic slowdown and weaker consumer confidence has led to substantially lower first quarter profits.
"Fuel prices have doubled in the past year. A successful hedging programme mitigated the impact but nevertheless fuel costs at £706 million were up £233 million in the quarter.
"We expect our fuel bill to top £3 billion this year – the equivalent of more than £8 million every day."
He went on: "We are well prepared. Since year end we have adapted our plans to reflect the fast moving and challenging conditions.
"We have reduced capacity in the winter schedule without compromising our network and at the same time we have the flexibility in the business to capitalise when conditions improve.
"We have revised our capital expenditure plans and are focusing on cost control.
"We have ordered six new Boeing 777-300ER aircraft for delivery beginning in 2010. They are 23 per cent more fuel efficient than the Boeing 747-400 and give us additional flexibility in the long-haul fleet."
Mr Walsh continued: "I'm pleased to say that talks towards a merger with (Spanish carrier) Iberia are under way. This is good news for both airlines, our shareholders and our customers.
"The potential benefits are significant. We can build on our successful 10-year relationship with increased efficiencies, synergies and an excellent network fit.
"It will be several months before talks are finalised but we are confident of securing regulatory approval.
"Our talks with American Airlines and Iberia towards further co-operation are progressing well.
"Despite the difficult situation the industry is in, we remain absolutely focused on the interests of our customers."
The full article contains 366 words and appears in The Scotsman newspaper.
