Oil price means BA can barely make a profit on flights

The record oil price means British Airways can barely make a profit on flights despite being poised to announce a record profit margin on its operations in the year to the end of March.

The carrier will report its annual results on Friday and analysts are confident these will show the 10% operating profit promised by chief executive Willie Walsh.

However, BA has warned profits for the current financial year will be down.

Its head of sales Drew Crawley told members of the Guild of Travel Management Companies meeting in Istanbul: “At an oil price of $117 a barrel, a 10% operating margin goes down to break even.”

The oil price passed $126 earlier this week and shows no sign of returning to the level of recent years.

Crawley said the cash flowing out of the airline industry as a result was greater than following the September 11 attacks, when aviation last went into a downturn.  He warned: “The challenge requires us to continue to review our business.”

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