British Airways reported pre-tax losses of £148m in the three months to June 30 today in a new grim record for the embattled airline.
The slump into the red marks its first ever loss for the first quarter since privatisation in 1987.
BA said it was taking further action to slash costs as the market showed “no visible signs of improvement” and it is continuing talks with unions.
It has already cut 4,000 jobs in the past year and said around 7,000 staff have supported its cost-saving plan – including pay freezes and volunteering to work unpaid for up to a month.
The first quarter results – traditionally strong for the carrier, coming at the start of the holiday season – revealed operating losses of £94m, against £35m in profits a year ago, and a 16.8% plunge in underlying revenues.
But BA said there was some stabilisation in declines seen in the number of passengers flying during the three months, which it expects to improve further over the peak summer months.
It also forecast another 20%, or £145m, in annual savings for the financial year and said it was squeezing suppliers to reduce costs.
The group is cutting more capacity, confirming it will “park” 22 planes in total by winter 2010.
Willie Walsh, chief executive of BA, said: “Trading conditions continue to be very challenging, with underlying revenue down 16.8% and no visible signs of improvement.
“While traffic volumes are down considerably compared to last year, they have stabilised during the quarter and show some signs of improvement for the peak summer months.”
He added: “Our work to reduce costs, which started last October, is beginning to bear fruit as they are down 6.6%, but with revenue still weak, there is much more to be done.”
Mr Walsh said he remained confident of reaching a deal with unions on cutting thousands of jobs and freezing pay as part of the airline's cost-reduction drive.
Long-running talks between the company and unions representing cabin crew, baggage handlers and check-in staff are in a “cooling-off” period due to end in a week’s time.
Mr Walsh said: “We are confident we can achieve the reductions we are seeking.”
The BA boss said he did not want to comment publicly on the state of the negotiations during the current cooling-off period.
