BA manages to head above water in difficult year

Despite major setbacks in the form of cabin crew strikes and a volcanic ash cloud, British Airways is soldiering along, and the latest report is that the company expects to break even before tax over the whole year.  Willie Walsh, BA’s chief executive, told interviewers that higher yields and cost cutting have improved the company’s overall revenue, and that they will continue to lower costs and implement structural changes across the board in the coming months.

Due to the eruption of the volcano Eyjafjallajökull in Iceland, BA was forced to cancel many of its European flights for about seven days in April, at a cost to the airline of about £108 million, including compensation to stranded passengers.  However, BA and other airlines protested that the government-enforced closures were an overreaction, and hope to reclaim some of those costs.

The dispute over pay and staffing levels involving 12,000 BA cabin crew members had been going on for 18 months when it devolved into strikes and walkouts in March.  The loss in revenue over the 22-day strike bumped the airline’s total losses for the quarter to about C250 million, creating a net loss for the period of about £16 million more than the same period last year.

No final agreement has been reached in the negotiations between CEO Walsh and the Unite union that represents British Airways flight attendants, but no more walkouts are expected for at least a month, and if they do occur, the airline will continue to operate a “significant number” of flights with new hire employees.