European Airline Traffic Falls - Wrapup
British Airways predicted a second year of operating losses on Thursday and said it would make further job cuts, while easyJet and Air Berlin added to the industry gloom with news of lower passenger numbers.
British Airways said in an update to investors it expects an operating loss in the year to March 2010 on a level with the year just ending -- which was forecast by the airline in January to be GBP150 million pounds (USD$212 million).
It said revenue was expected to be down 5 percent, compared with a 3.5 percent rise in the current financial year, and said it would drive through GBP220 million of cost savings -- a move it said would lead to further job cuts.
A ruling on its fresh attempt to form an alliance with American Airlines is now expected by October, it added.
Meanwhile low-cost rival easyJet ended a long run of rising monthly passenger volumes by reporting a 6.8 percent fall in February on a year ago.
Air Berlin also reported a drop in its passenger numbers, down 8.5 percent in a month where matching 2008 levels was always going to prove more difficult because a leap year in 2008 meant there was an extra day of business a year ago.
BA had said on Wednesday it suffered an 8.3 percent fall in its passenger traffic, while Ireland's Ryanair has proved the only gainer to date with a 7 percent increase.
Frankfurt Airport operator Fraport braced itself for the decline, saying on Thursday that its 2009 earnings and sales would both fall due to lower demand, although it did see a pick-up in Frankfurt in 2010.
Fraport CEO Wilhelm Bender also said the firm was interested in any British airports put up for sale by Spain's Ferrovial following a review by British regulators due later this month.
London's Gatwick Airport is already up for sale, although Fraport is not among the bidders.
GOING SLOWLY
The raft of bad news came a day after the long running auction of Greece's ailing state carrier Olympic took a twist with the last minute entry of Aegean Airlines with a bid that trumped the only other bidder.
EasyJet also spoke out against attempts by the Association of European Airlines (AEA) to relax rules on airline usage of take-off and landing slots at major airports -- a move the AEA hopes would help the industry cut capacity.
EasyJet said the move, which would scrap rules that holders must use slots 80 percent of the time, was a form of state aid.
BA/American/Iberia
British Airways was hosting its day out for investors at its headquarters at London's Heathrow Airport.
As well as the cost-cutting and profit forecasts, it updated on jobs and its campaign to win anti-trust immunity for its transatlantic alliance with American Airlines and Spanish merger target Iberia, saying it expected a decision by US regulators by September or October.
"It is going more slowly than other applications. We had other interested parties raise a slew of issues but we would hope that phase of information gathering is close to completion," head of strategy Robert Boyle told the audience.
BA and AA have tried to form an anti-trust-approved alliance twice before without success, but now believe the transatlantic 'open skies' agreement that freed up Heathrow to competitors had changed the landscape.
BA director Tony McCarthy added that the airline was talking to unions about increasing productivity, and that this would eventually lead to further redundancies among the global work force of 43,000 following 500 voluntary losses late last year.
He added that the group did not envisage awarding a pay increase to staff this year.
