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Weak economy hits British Airways Weak economy hits British Airways
(about 12 hours later)
British Airways has announced that it made a loss of £70m in the nine months to 31 December, bruised by further economic weakness and the weak pound.British Airways has announced that it made a loss of £70m in the nine months to 31 December, bruised by further economic weakness and the weak pound.
In same the period a year earlier, BA had made a profit before tax of £816m.In same the period a year earlier, BA had made a profit before tax of £816m.
BA has many costs in dollars and the decline in sterling makes things like aircraft leasing more expensive.BA has many costs in dollars and the decline in sterling makes things like aircraft leasing more expensive.
BA said it would try to sell more tickets in markets with stronger currencies to enable it to benefit from exchange rates.BA said it would try to sell more tickets in markets with stronger currencies to enable it to benefit from exchange rates.
The weak pound has also meant that air traffic control and airport charges have become more costly for the airline.The weak pound has also meant that air traffic control and airport charges have become more costly for the airline.
Difficult conditionsDifficult conditions
Passenger traffic has declined as the economic downturn means people are travelling less. BA has also been offering special deals to encourage people to fly.Passenger traffic has declined as the economic downturn means people are travelling less. BA has also been offering special deals to encourage people to fly.
"The industry continues to face very difficult trading conditions on the back of a weak economic environment," the airline said."The industry continues to face very difficult trading conditions on the back of a weak economic environment," the airline said.
However, BA's latest passenger numbers offered a glimmer of hope.However, BA's latest passenger numbers offered a glimmer of hope.
While overall passenger numbers were down 4% from January 2008 there had been a 1.4% rise in "non-premium" traffic in January, BA said.While overall passenger numbers were down 4% from January 2008 there had been a 1.4% rise in "non-premium" traffic in January, BA said.
BA shares were up 2.9% at 130.6 pence in morning trade. BA shares closed up 10.5% at 141 pence on Friday.
Fuel costs climbed 48% to £2.2bn but BA said it would begin to benefit from falling fuel prices in the 2009/2010 financial year.Fuel costs climbed 48% to £2.2bn but BA said it would begin to benefit from falling fuel prices in the 2009/2010 financial year.
Revenue rose 6.2% to £7.1bn.Revenue rose 6.2% to £7.1bn.
The airline had already warned that it expects to make an operating loss of about £150m in the 2008/2009 financial year.The airline had already warned that it expects to make an operating loss of about £150m in the 2008/2009 financial year.