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Airlines

FTSE 100 Heavy-Hitters Report Figures, BA Plots Massive Loss

Strategic Insights

— 2 min read

British Airways (BA) is likely to report a substantial loss of around GBP 100 million, making it the first time since its 1987 privatization that the airline has reported a first-quarter loss. In contrast, other FTSE 100 heavy-hitters, such as oil major BP and British Gas owner Centrica, are set to post figures that reflect the ongoing economic uncertainty.

Key Takeaways:

  • British Airways is expected to report a significant loss of around GBP 100 million, the first such loss since its privatization in 1987.
  • The airline's first-quarter revenues are forecast to be around GBP 1.98 billion, with an operating loss that is "slightly better than market expectation".
  • British Airways has raised GBP 350 million through a debt issue to boost liquidity, while also removing GBP 330 million from its pension fund.
  • BA's Chief Executive, Willie Walsh, has proposed cutting 3,700 jobs, freezing pay for up to two years, and asking staff to volunteer for unpaid leave for up to a month.
  • BSkyB is expected to report strong growth in its fourth quarter, with a 13% rise in operating profits for the year.
  • Analysts predict a full-year profit of GBP 660 million for BSkyB, a 4% increase from the previous year.
  • Rolls-Royce is expected to report marginally increased half-year profits, with a pre-tax profit of GBP 411 million.
  • BP's underlying profits are forecast to be around one-third of their 2008 level, at around dollars 2.8 billion.

Statistics:

  • British Airways' expected loss: GBP 100 million
  • BA's first-quarter revenues: GBP 1.98 billion
  • BA's operating loss: "slightly better than market expectation"
  • Number of redundancies proposed by BA: 3,700 jobs
  • BSkyB's expected full-year profit: GBP 660 million
  • Rolls-Royce's expected pre-tax profit: GBP 411 million
  • BP's expected underlying profits: dollars 2.8 billion

Sources:

  • "The company also said when it announced a fundraising move earlier in the month that first-quarter revenues would come in at about GBP 1.98 billion." (Undated)
  • "BA raised a total of GBP 350m in a debt issue aimed at boosting liquidity earlier this month." (Undated)
  • "The deal it had struck with the trustees of its UK defined benefit pension schemes undid provisions arranged in 2006..." (Undated)
  • "Fuel costs reached nearly GBP 3bn last year because of soaring oil prices..." (Undated)
  • "BSkyB reported far better than expected net additions of high-definition (HD) customers in the three months to the end of March - at 234,000..." (Undated)
  • "The group slashed the cost of an HD box from GBP 150 to GBP 49, which sent demand soaring." (Undated)
  • "Rolls-Royce is expected to report marginally increased half-year profits on Thursday." (Undated)
  • "Analysts predict a pre-tax profit of GBP 411m for the period - up GBP 1m from the same period last year." (Undated)
  • "BP's underlying profits between April and June last year stood at dollars 8.6bn (GBP 5.2bn) but consensus forecasts for when it reports tomorrow are for about a third of this level this year - at dollars 2.8bn." (Undated)
  • "A chilly winter and greatly reduced wholesale gas prices are expected to be reflected in British Gas's half-year results when parent company Centrica reports on Thursday." (Undated)
  • "John Musk, of Nomura Equity Research, predicts British Gas will have boosted operating profits 70 per cent to GBP 283m in the half year." (Undated)

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