Analysts ‘braced for BA profit warning’
29.04.08
British Airways will issue its second profit warning of the year next month in response to record oil prices, according to the Independent. The newspaper says that analysts believe the airline has been ‘actively guiding’ their expectations lower before its annual results are announced on May 16. The Independent adds that the sustained high oil price would mean BA's margin would shrink to as little as 3% next year, down from 10% in the year to the end of March.
Last month, BA abandoned its target of achieving a 10% operating margin for the March 2009 financial year, and predicted that it would fall to 7%, based on an oil price of $85 dollars per barrel. However, the price is now just under $120 per barrel, which 'has already sent several airlines into bankruptcy and forced others to raise fares to deal with the unprecedented rise in costs', the Independent reports.
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