British Airways (BA) today said its first-half loss widened as cuts in capacity failed to keep pace with a slump in demand prompted by the economic recession.
Europe's third- largest airline reported a net loss in the six months through September 30th of £217 million, compared with £49 million a year earlier. Sales fell 14 per cent to £4.1 billion.
The pretax loss for the six months to end September of £292 million.
Premium traffic, which accounts for almost half of the carrier's revenue, has fallen for 14 consecutive months as business passengers cut back on trips.
BA is reducing seating, paring investment in planes and trying to lower spending on labour to make up for the drop in demand.
"We were quick to respond to the crisis by taking out excess capacity, and at the same time, driving down unit costs," CEO Willie Walsh said in a statement. "We will introduce further structural change in the second half to secure the long term future for our business."
Airlines worldwide may lose $11 billion this year as they cut fares to win back passengers, according to the International Air Transport Association.
BA may also face the first strike by its own employees in more than 10 years after failing to reach an agreement on new contracts with the union that represents 96 per cent of its 14,000 flight attendants.
BA is seeking £140 million in cabin-crew cost savings, and the airline is in talks with Iberia about an all-share merger that would create a carrier with two fleets.
The airlines is also waiting for US Department of Transportation approval for a sales tie-up with American Airlines.For
Bloomberg