Airlines upbeat despite ash losses

Staff strikes and volcanic ash cost British Airways £250 million in the three months to June 30, the airline has announced.

While passengers travelling from London to Stansted and Luton airports were also affected by Iceland’s volcanic eruption, BA’s troubles were exacerbated by 22 days of industrial action by cabin crew. 

Its ongoing dispute with the Unite union, combined with almost a week of grounded planes due to closed European airspace in April, sent the airline £164 million into the red. 

Staff strikes and volcanic ash cost British Airways £250 million in the three months to June 30, the airline has announced.

This meant its overall first-quarter revenue dropped 2.3% to hit £1.94 billion, while an 11.2% fall in passenger capacity meant that ticket sales were down 3.4%. 

Chief executive Willie Walsh said that, despite the unresolved cabin crew issues which could see more walkouts in September, BA still expected to break even in 2010 following two years of successive losses. 

In July BA received US regulatory clearance for a transatlantic flight alliance with American Airlines and Iberia and agreed a pension scheme recovery plan with regulators. 

Meanwhile, Sir Richard Branson’s airline Virgin Atlantic announced that it made a big operating loss last year but that revenues and passenger numbers rose in the first part of this year. 

Virgin’s group pre-tax operating loss for the period March 2009 to February 2010 was £132 million, compared with a profit of £60 million for March 2008 to February 2009. 

Revenues for 2009/10 decreased 8.6% to £2.35 billion but operating costs reduced 8%. 

Virgin Atlantic chief executive Steve Ridgway said: “The start of the year has been encouraging despite difficult trading conditions. Demand is picking up across the majority of our routes and forward bookings for the summer have been very positive. 

“From all of the major operational challenges that we have faced this year – including snow and volcanic ash – the response from everyone at Virgin Atlantic has been outstanding.” 

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