British Airway profits dive 92pc in 'one of bleakest six months on record'

by Dave Keating | November 7, 2008 at 01:59 am

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British Airways has revealed that it is in deep trouble, with its profits falling 92 percent in the past six months. The company sited rising fuel costs as one of the problems as well as a dropoff in demand.

"The six-month period will be remembered as one of the bleakest on record," said chief executive Willie Walsh as he reported that pre-tax profits tumbled to £52m in the six months to September, down from £616m in the same period last year.

However, BA shares opened up as much as 22pc as the 75pc fall in operating profits to £140m were much better than expected. Analysts had predicted an estimated £88m. The company also said it was on track to achieve a small profit in full year.

Costs rose by £711 million, Mr Walsh said, and remain a key challenge. Fuel costs for the period were up £511 millon at £1,49 billion.

Mr Walsh said the company still expected its annual fuel bill to be up some 50pc at around £3 billion. Employee costs, including a £40 million severance provision, rose 8.6pc.

Operating profits fell 75pc to £140m from £567m, which was much better than expected. Analysts had predicted an estimated £88m. The company said it was on track to achieve a small profit in full year.