British Airways has put the blame on doubled fuel costs for a sharp decline in profits, stating the airline industry is now facing the ‘worst trading environment ever’. The carrier reported pre-tax profit of £37m in the latest quarter compared with a whopping £298m profit made in the corresponding quarter a year earlier. This means there is a huge 88 per cent drop in profits.
British Airways added it would cut 3 per cent of flights this winter for reducing overheads. BA earlier this week announced it was holding merger talks with Spanish airline Iberia.
BA stated its fuel bill was slated to be close to £3bn in the year (to the end of March), the equivalent of around £8m per day. It insisted it was ‘well prepared’ to deal with the crisis with a focus on controlling operational costs. BA chief executive Willie Walsh stated, “We are operating in the worst trading environment that the industry has ever faced. The combination of economic slowdown, weaker consumer confidence and unprecedented oil prices has led to substantially lower first quarter profits.”