British Airways Plc, Europe's largest airline, posted a third-quarter profit, reversing a year-earlier loss, after the company cut one-sixth of its workforce, scrapped unprofitable routes and streamlined its fleet.
Net income in the three months ended Dec. 31 was UK Pound 13 million (US$21 million), or 1.2 pence a share, compared with a net loss of UK Pound 144 million, or 13.4 pence, in the year-ago period, the company said in a Regulatory News Service statement.
Analysts surveyed by Bloomberg expected a loss of 53 million pounds.
"The route to profitability in the short term is going to be through cost reduction," said Chris Tarry, an independent aviation analyst, in an interview. This year "is likely to be a much tougher year for the airline industry than 2002."
British Airways has cut 9,209 of its 56,500 employees and expects to reduce its workforce 23 percent by March 2004 as it tries to counter a slump in air travel after the Sept. 11 attacks in the US and a drop in business traffic amid a global economic slowdown.
It's also reorganized its European short-haul flights to compete with low-cost rivals such as EasyJet Plc.
"Our total costs in the last 12 months are UK Pound 1 billion lower than the previous year, which demonstrates the determination of our people to deliver," Chief Executive Officer Rod Eddington said in a Regulatory News Service statement.
The company said it expects to post a full-year profit, reversing a UK Pound 142 million loss in fiscal 2002, though it sees no growth in revenue in the next 12 months. Sales rose 1 percent to UK Pound 1.86 billion in the third quarter.
"In the absence of hostilities in the Middle East, we expect this financial year to be profitable," Chairman Lord Marshall said in the statement. "We expect the business environment to be tougher in 2003 than last year."
The carrier said it remains on target to reduce its workforce by 10,000 employees to 46,500 by the end of March.
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