Annual profits tumble at BA

Aer Lingus and British Airways have insisted that the talks to link up in a global alliance will not be affected by BA's massive drop in profits.

The results, announced yesterday, showed that over the year, profits fell by 61 per cent from £580 million sterling (€876 million) to £225 million last year.

BA said the global economic slowdown and tougher competition in budget flights was responsible for the results, the airline's worst since 1993. The company made consecutive losses in the third and fourth quarters which depressed full-year profitability. The company also warned that the situation would not improve in the short term. Alliance negotiations between Aer Lingus and BA and American Airlines are expected to start in July, once the Minister for Public Enterprise, Ms O'Rourke, approves it.

This will then clear the way for further negotiations between Aer Lingus and the Oneworld Alliance of which BA and AA are members.

A spokeswoman for BA said last night that the airline had a longterm commitment to developing strategic alliances or partnerships with other airlines. This would continue, she said, and the results would not have any effect on this strategy, of which talks with Aer Lingus will be a part.

An Aer Lingus spokesman would only say the board's recommendations (to open talks with BA and AA) were with the Government, which is the shareholder, and the company was awaiting approval for them.