Massive slump of 92% in first-half profits has forced British Airways to cut next summer’s capacity, as it forecast bleak outlook for 2009.

High fuel costs compounded by the banking crisis and poor peak season this year, resulted in sharp fall in pre-tax profit from £616m in the same period last year to £52m in 2008. However growth in revenue was up 6.4% to £4.8bn since BA refused to cut down prices during weak demand and adopted strategy different from low-cost rivals. Its chief executive Willie Walsh claimed that it had done well against very tough economic conditions.

BA is heavily dependent on financial services industry for its revenues as nine out of 20 customers belonged to this sector. It draws maximum business from London Heathrow to New York-JKF route which is heavily used by financial professionals and bankers.

Walsh commented that last 6 months’ period would be remembered as the bleakest on BA’s record, which was impacted by banking crisis, record oil prices and closure of several airlines.

BA has planned to cut its summer capacity by 1% next summer by reducing flights on busiest routes. It would also drop 4 routes next year including Heathrow services to Kolkata (India), Dhaka (Bangladesh) and Gatwick routes to Zurich and Dublin.

The airliner pointed out that stronger dollar had offset gains of fall in fuel prices and ruled out significant cut in fuel surcharges.