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BA may face £350m collusion fine | |
(10 minutes later) | |
British Airways has said it has put aside £350m to cover possible fines over breaches of competition law. | British Airways has said it has put aside £350m to cover possible fines over breaches of competition law. |
The charge relates to a finding last year that it had discussed fuel surcharges with competitors. | The charge relates to a finding last year that it had discussed fuel surcharges with competitors. |
The news came as BA said annual operating profits had slumped 13% to £602m after a spate of negative events. | The news came as BA said annual operating profits had slumped 13% to £602m after a spate of negative events. |
Thousands of flights were cancelled after a terror threat in August, with many more hit by severe fog over the Christmas period. | Thousands of flights were cancelled after a terror threat in August, with many more hit by severe fog over the Christmas period. |
And a proposed cabin crew strike was called off but not before thousands of passengers had cancelled reservations. | And a proposed cabin crew strike was called off but not before thousands of passengers had cancelled reservations. |
'Frustrating' | |
Pre-tax profits fell 0.8% to £611m, better than analysts had expected. | Pre-tax profits fell 0.8% to £611m, better than analysts had expected. |
British Airways (BA) chief executive Willie Walsh said the results were " strong" in what had been "a challenging year", which saw sales up 3.4% to £8.49bn in the year to 31 March, | British Airways (BA) chief executive Willie Walsh said the results were " strong" in what had been "a challenging year", which saw sales up 3.4% to £8.49bn in the year to 31 March, |
"We know at times it has been a frustrating year for our customers, caused by disruption and overly restrictive UK government security measures on hand baggage," he said. | "We know at times it has been a frustrating year for our customers, caused by disruption and overly restrictive UK government security measures on hand baggage," he said. |
Details of the alleged price-fixing of fuel surcharges emerged in June last year. | |
And in October commercial director Martin George and communications chief Iain Burns - who had been on leave of absence since the probe began - quit the company. | |
The UK Office of Fair Trading and the US Department of Justice are looking at claims that BA had been informing other airlines of its fuel surcharge plans. | |
BA admitted it had contacted a competitor over fuel surcharges. | |
Takeover target | |
The August terror threat saw BA cancel 1,280 flights, and left BA with a hefty bill for hotels, catering and baggage recovery. | The August terror threat saw BA cancel 1,280 flights, and left BA with a hefty bill for hotels, catering and baggage recovery. |
Increased security restrictions introduced also meant the number of business passengers taking its flights fell in the following weeks. | Increased security restrictions introduced also meant the number of business passengers taking its flights fell in the following weeks. |
Last-gasp talks in January prevented a series of strikes, but the cancellations already made led to profits falling 72% between January and March. | |
After the collapse of a private equity bid for Australia's national carrier Qantas, some analysts have tipped BA as a potential takeover target. | After the collapse of a private equity bid for Australia's national carrier Qantas, some analysts have tipped BA as a potential takeover target. |
Its shares rose 2.4% on Thursday as Goldman Sachs described it as the "jewel in the crown" in terms of its attractiveness to potential buyers. | Its shares rose 2.4% on Thursday as Goldman Sachs described it as the "jewel in the crown" in terms of its attractiveness to potential buyers. |
BA is also believed to be considering a bid for Spain's carrier, Iberia, in which it already owns a 10% stake. | BA is also believed to be considering a bid for Spain's carrier, Iberia, in which it already owns a 10% stake. |
Earlier this year the airline sold off its loss-making regional airline BA Connect as it tried to plug a hole in its £2.1bn pension deficit. | Earlier this year the airline sold off its loss-making regional airline BA Connect as it tried to plug a hole in its £2.1bn pension deficit. |
The airline also announced on Friday that it had ordered eight new short haul Airbus A320 planes for delivery between 2008 and 2010. | The airline also announced on Friday that it had ordered eight new short haul Airbus A320 planes for delivery between 2008 and 2010. |