British Airways issued a profits warning today, saying it expects to report a £150-million operating loss in the year to March – a downturn on previous forecasts of a small annual profit.
A £150 million loss would represent a £1-billion turnaround on the record profits BA announced a year ago.
The fall in sterling has compounded the impact of a downturn in premium traffic owing to the recession and not been offset by the fall in the cost of fuel. The carrier issued a statement warning: “Costs are being impacted by foreign exchange and non-fuel costs are expected to rise by 8% year on year compared to previous guidance of 5%.”
BA will release results for the last quarter of 2008 next week, with losses for the three months expected to total £50 million.