British Airways Plc, Europe's biggest airline, had a fiscal first-quarter loss of British Pound 63 million (US$102 million) and said a wildcat walkout by check-in workers at London Heathrow Airport in the middle of last month cost it as much as British Pound 40 million in sales and costs.
The net loss per share in the three months ended June 30 was British Pound 0.059. British Airways had net income of British Pound 40 million, or British Pound 0.037 a share, in the year-earlier period.
Sales fell 11 percent to British Pound 1.8 billion in the latest quarter, the London, England-based company said in a Regulatory News Service statement.
"The direct cost of the unofficial industrial disruption in July will be in the range of British Pound 30 million to British Pound 40 million reflecting costs incurred and lost revenue," said chief executive Rod Eddington in the statement.
"The uncertainty has also impacted forward bookings and will reduce revenue. It continues to be an extremely challenging revenue environment," Eddington said.
British Airways has cut fares, which reduced revenue, to attract passengers after the war in Iraq, the outbreak of SARS and slowing economies caused demand for air travel to decline.
The airline yesterday settled a dispute with check-in workers, ending a threat of more strikes next month. A walkout at London Heathrow Airport on July 18 and 19 stranded 90,000 passengers.
The settlement yesterday restricted the use of a new swipe-card system to registering whether an employee had entered or left a building. The agreement followed a series of talks with unions following the wildcat strike.
British Airways is accelerating a 23 percent workforce cut as it tries to reduce costs by British Pound 650 million by next March and a further British Pound 450 million by March 2005.
British Airways will also retire its supersonic Concorde fleet this year because the planes are too expensive to operate.
Passenger traffic at British Airways rose 1.7 percent in the three months through June, while the carrier cut seating capacity 0.2 percent lower.
The yield, a measure of revenue per passenger, dropped 12.7 percent during the quarter. The load factor, or proportion of seats filled, increased 1.3 percentage points to 71.8 percent.
European airlines will post losses of between US$1 billion and US$2.4 billion this year as the spread of SARS, the Iraq war and a slowing economy discourage people from flying, the Brussels-based Association of European Airlines has estimated.
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