British Airways has had its worst year yet
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British Airways has had its worst year yet
British Airways has had its worst year yet, recording a loss of £200m before tax and one-off charges for the year to March 2002.
"We have had to take a series of tough decisions this year to protect BA for the long term". Rod Eddington, BA
But while the numbers are dismal considering BA's record, they are much better than many investors had feared.
Some forecasts had had BA losing more than £400m, following a profit of £186m in the previous 12 months.
For the fourth quarter from January to March 2002, figures showed the beginnings of a turnaround, with aircraft flying slightly more full than the year before and costs down 12.8%.
"We have had to take a series of tough decisions this year to protect BA for the long term," said chief executive Rod Eddington.
Looking ahead, he admitted the market was going to remain weak for a while.
But he insisted that the quarterly improvement - down to the "dedication of staff in delivering cost efficiencies and high standards of customer service" - would carry the firm through the difficult times.
Annus horribilis
The company has had a difficult year, as the aftermath of 11 September saw passenger numbers slump while its cut-price, no-frills competitors cleaned up.
The threat from the likes of Easyjet - which has now bought BA's former subsidiary Go - has led the company to rework its fare structure.
It has also cut back its fleet and switched some operations from Gatwick to Heathrow.
But even before the attacks on New York City and Washington DC, BA was having a hard time of it, and the poor performance throughout the year has led to plans for 13,500 redundancies.
Also on the agenda is a cost-cutting programme aimed at slicing £670m off the airline's spending by 2004.
But there are signs that it is pulling round, with passenger revenue kilometres - a key measure of how much money is coming in - down 4.3% in the fourth quarter despite an 11% drop in overall capacity.
Passenger revenue kilometres measures how much money is made out of passengers, depending on how far they travel.
"We have had to take a series of tough decisions this year to protect BA for the long term". Rod Eddington, BA
But while the numbers are dismal considering BA's record, they are much better than many investors had feared.
Some forecasts had had BA losing more than £400m, following a profit of £186m in the previous 12 months.
For the fourth quarter from January to March 2002, figures showed the beginnings of a turnaround, with aircraft flying slightly more full than the year before and costs down 12.8%.
"We have had to take a series of tough decisions this year to protect BA for the long term," said chief executive Rod Eddington.
Looking ahead, he admitted the market was going to remain weak for a while.
But he insisted that the quarterly improvement - down to the "dedication of staff in delivering cost efficiencies and high standards of customer service" - would carry the firm through the difficult times.
Annus horribilis
The company has had a difficult year, as the aftermath of 11 September saw passenger numbers slump while its cut-price, no-frills competitors cleaned up.
The threat from the likes of Easyjet - which has now bought BA's former subsidiary Go - has led the company to rework its fare structure.
It has also cut back its fleet and switched some operations from Gatwick to Heathrow.
But even before the attacks on New York City and Washington DC, BA was having a hard time of it, and the poor performance throughout the year has led to plans for 13,500 redundancies.
Also on the agenda is a cost-cutting programme aimed at slicing £670m off the airline's spending by 2004.
But there are signs that it is pulling round, with passenger revenue kilometres - a key measure of how much money is coming in - down 4.3% in the fourth quarter despite an 11% drop in overall capacity.
Passenger revenue kilometres measures how much money is made out of passengers, depending on how far they travel.
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"The threat from the likes of Easyjet - which has now bought BA's former subsidiary Go - has led the company to rework its fare structure. "
......and Mr Eddington said there was no room for Go in BAs future size and shape? Perhaps not- but surely Go did more damage than good to BA, when GO could have absorbed more if not most BA short haul routes and employed staff on new contracts returning short haul to profitability. May be Ayling did see what was coming from the low cost industry- a threat to them.
Its a real pity to see BA in this shape, our flag carrier, the innovator of aviation technology and comfort- but why does the airline attract such bad management?
The futures bright...the futures orange
......and Mr Eddington said there was no room for Go in BAs future size and shape? Perhaps not- but surely Go did more damage than good to BA, when GO could have absorbed more if not most BA short haul routes and employed staff on new contracts returning short haul to profitability. May be Ayling did see what was coming from the low cost industry- a threat to them.
Its a real pity to see BA in this shape, our flag carrier, the innovator of aviation technology and comfort- but why does the airline attract such bad management?
The futures bright...the futures orange
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British Airways today posted a pre-tax loss of £200 million.
Net debt was also reduced by £268m in the quarter.
268-200=68
So that means a profit of £68 million could have been reported which is not so bad compaired to other airlines.
Do the maths add up ?
....zzzzzzzzZZZZZZZZZZZZ
Net debt was also reduced by £268m in the quarter.
268-200=68
So that means a profit of £68 million could have been reported which is not so bad compaired to other airlines.
Do the maths add up ?
....zzzzzzzzZZZZZZZZZZZZ
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Goforfun
There is always this rubbish talked about Go absorbing BA shorthaul if we had not sold it.
Never heard so much c**p. People would have perceived two different brands and BA would have been competing with itself. But what is the point of setting up a subsidiary which is in direct competition with your core buiness. Since the economic downturn last year and terrorist activity BA's had no choice but to start addressing it's root problem it's own costs were too high.
Also do any of you imagine that Balpa or the various cabin crew unions would have allowed BA to transfer it's shorthaul business away to Go. Don't think so.
There is always this rubbish talked about Go absorbing BA shorthaul if we had not sold it.
Never heard so much c**p. People would have perceived two different brands and BA would have been competing with itself. But what is the point of setting up a subsidiary which is in direct competition with your core buiness. Since the economic downturn last year and terrorist activity BA's had no choice but to start addressing it's root problem it's own costs were too high.
Also do any of you imagine that Balpa or the various cabin crew unions would have allowed BA to transfer it's shorthaul business away to Go. Don't think so.
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We need to look at the big picture here. The problems experienced in aviation during the past year are unprecidented. Worse than was experienced during the Gulf War infact, when BA was the only airline to remain profitable. Compare BAs losses against comparable airlines and you can see that BA is doing remarkable well considering. It is paying back it's debt and starting to fill it's aeroplanes. With it's new fare structures a lot of people will return to BA when they realise what they have lost by switching to the low cost sector. You might remember that during the year after the Gulf War BA posted record profits. Hopefully time may be about to repeat itself.
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As someone who went through the Gulf war with BA, I have found that the main difference between then and now is, as Goforfun has said, the quality of the mangement team.
During the Gulf War we had a team who seemed to know something about operating an airline, now we have Skippy and Co who only seem to know about demoralising the staff.
I can honestly say that never has staff morale been so low, there is no confidence in senior management and no sign of any improvements.
During the Gulf War we had a team who seemed to know something about operating an airline, now we have Skippy and Co who only seem to know about demoralising the staff.
I can honestly say that never has staff morale been so low, there is no confidence in senior management and no sign of any improvements.
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"People would have perceived two brands and BA would have been competing with itself..."
People are still perceiving two brands, and if GO's loads are anything to go by, they are enjoying the perceiving so to speak. But at least now they really are competition, really are doing well, and someone else and not BA is making the money, so that has got to be ok then........................................???????????????? ? Oh, and its great for morale....................
People are still perceiving two brands, and if GO's loads are anything to go by, they are enjoying the perceiving so to speak. But at least now they really are competition, really are doing well, and someone else and not BA is making the money, so that has got to be ok then........................................???????????????? ? Oh, and its great for morale....................
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I understand a large number of staff have taken either unpaid leave or part time working. What will happen when these staff decide to return to their original contracts and pay? If the business has not recovered enough surely the costs of the airline will rise once again
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The management team at BA are good at one thing - covering their backsides!
What a wizard wheeze! Alert the City to expect a £400m loss, then announce a £200m loss and make it sound as though you've done a cracking job!
No mention of three factors:
"Go" was sold for £85m which BA said was a "good return" on its initial investment of £25m! (No mention of the first year's operating costs of £70m and the 2nd year £50m) "Go" was actually sold at a LOSS of £60m!!!
If "Go" had been retained for 1 year, it would now have fetched £375m, giving BA a profit of £175m. I know hindsight is a wonderful thing, but if "Go" had gone under, BA management would have taken the glory for "offloading it" in time, now they should face the brickbats for such disastrous decision making!
The "part-time" board members paid thumping great amounts to drink coffee for a couple of hours on a Friday afternoon and compare BA's performance to that of Tesco's and suchlike! (Yes, they receive complimentary first-class travel into the bargain!)
No one, shareholders or competitors alike, wish to see the flag carrier go under, but I can see the day when the banks foreclose unless the management provide a solid foundation for re-building the former "World's Favourite" into "Britain's Facvourite"!
What a wizard wheeze! Alert the City to expect a £400m loss, then announce a £200m loss and make it sound as though you've done a cracking job!
No mention of three factors:
"Go" was sold for £85m which BA said was a "good return" on its initial investment of £25m! (No mention of the first year's operating costs of £70m and the 2nd year £50m) "Go" was actually sold at a LOSS of £60m!!!
If "Go" had been retained for 1 year, it would now have fetched £375m, giving BA a profit of £175m. I know hindsight is a wonderful thing, but if "Go" had gone under, BA management would have taken the glory for "offloading it" in time, now they should face the brickbats for such disastrous decision making!
The "part-time" board members paid thumping great amounts to drink coffee for a couple of hours on a Friday afternoon and compare BA's performance to that of Tesco's and suchlike! (Yes, they receive complimentary first-class travel into the bargain!)
No one, shareholders or competitors alike, wish to see the flag carrier go under, but I can see the day when the banks foreclose unless the management provide a solid foundation for re-building the former "World's Favourite" into "Britain's Facvourite"!
Last edited by bealine; 24th May 2002 at 09:42.
