BA: break-even would be ‘considerable achievement’
16.07.08
British Airways, Europe's third-biggest airline, said yesterday it will struggle to avoid losing money this year as its annual fuel bill rises beyond an earlier forecast of £3 billion. Chairman Martin Broughton told shareholders at its AGM breaking even in the 12 months to the end of March will be a ‘considerable achievement’ and that the airline must ‘make changes’ to report a profit.
With the oil price surging above $140 a barrel amid fears of a global recession, BA and its peers are ‘up to our necks in the biggest crisis the aviation industry has ever known,' Mr Broughton said, adding: ‘This will not be an easy year.’
He told investors that, with oil at $85 a barrel - a price last reached in February - BA would be on course for handsome profits. 'But the nearer the oil price moves to $125, the nearer we would come to the red. And with the oil price stabilising around where it has been for the last few weeks, the implications are obvious.'
Without going into detail, Mr Broughton said BA ‘will make changes’. It was not clear whether he was signalling job or other cost-cutting ahead. However, he said tough market conditions meant that BA had embarked on a review of how it might trim back its planned flights this year.
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