British Airways losses of £531 million in the year to March was a record, but it was also a good 12% better than travel analysts forecast and certainly not as dire as it might have been, given a massive loss of £1 billion in annual revenue.
To put BA’s losses into context, Air France KLM reported annual losses of €1.56 billion (£1.36 billion) for the same period, while Germanys Lufthansa’s operating losses for the first quarter of 2010 ballooned from euro44 million to €330 million (£287 million).
So BA is doing no worse than its major rivals and its losses are not so bad overall.
The good news is BA almost matched that loss of revenue in cost savings – slashing £597 million off its fuel bill and saving another £390 million elsewhere.
Those cost saving cuts include the worldwide loss of 3,800 staff in the past year alone, and more than 6,000 since September 2008, through voluntary redundancy, part-time working and natural attrition.
The airline also reported a much lower operating loss (£231 million), including £85 million in one-off restructuring costs. So the underlying figures appear much better.
The bad news is these figures do not include the impact of the ash crisis or the cost of resumed strikes by cabin crew – a joint bill that one analyst estimates at up to £300 million for the financial year just started. So the cost cutting will not stop.
In addition, while the £531 million loss for 2009-10 followed a £401 million loss in 2008-09, BA made a record £883 million profit in 2007-08 and a further £611 million in 2006-07. So the carrier is not at death’s door.