BRITISH Airways is on target to lose £124m in the year to March 2000 and the final figure could be even worse, according to leading investment bank ABNAmro.
The statement will heap further pressure on chief executive Bob Ayling, who is currently instigating a massive cost-cutting programme to try to improve the carrier’s performance.
ABNAmro transport analyst Peter Bergius radically changed his forecast that BA would only lose £4m in the financial year after a meeting with the carrier. In the year to March 1999, BA made a profit of £174m.
Bergius believes that excess capacity on European and transatlantic routes will have a severe impact on the airline in the current year.
The analyst also calculated that BA will have to pay an additional£40m in redundancy costs and face a £20m increase in its fuel bill.
In addition, BA has loans in yen and the bank estimates this will cost it an extra £60m because the yen is currently strong against the pound.
Bergius said the the final losses could be more than £124m.
Bergius refused to comment on the airline’s management, but a city source said Ayling’s strategy of cutting capacity in economy and investing heavily in business class was flawed. BA refused to comment on the loss forecast.
n See back page for BA Club Europe story