Robert Peston on BA - BA: Loaded down
"The most striking number in British Airways results for the past year was the £3bn it spent on fuel, which was 44.5% higher than in the previous year.
So for all the talk from Willie Walsh, BA's chief executive, that "the global downturn makes this the harshest trading environment we have ever faced", without the £900m jump in fuel costs the airline would have been very comfortably in profit: operating profits would have been around £700m.
In fact the evidence of BA's revenues is not of a cataclysmic global recession. Passenger revenues rose 3.1% to £7.8bn and cargo revenues were 9.4% higher at £673m. Which is not boom boom, but nor is it financial disaster at 30,000 feet.
What actually caused BA's worst ever loss of £401m before tax and the suspension of the dividend was a lamentable rise in costs:
Read on...
So for all the talk from Willie Walsh, BA's chief executive, that "the global downturn makes this the harshest trading environment we have ever faced", without the £900m jump in fuel costs the airline would have been very comfortably in profit: operating profits would have been around £700m.
In fact the evidence of BA's revenues is not of a cataclysmic global recession. Passenger revenues rose 3.1% to £7.8bn and cargo revenues were 9.4% higher at £673m. Which is not boom boom, but nor is it financial disaster at 30,000 feet.
What actually caused BA's worst ever loss of £401m before tax and the suspension of the dividend was a lamentable rise in costs:
Read on...