BA losses grow

Ash clouds from Iceland and strike action caused losses to grow at British Airways during a tough first quarter, although the airline still expects to break-even for the year.Losses before tax jumped to £164m in the three months ended 30 June from £148m a year ago as revenue fell by £46m, or 2.3%, to £1.94bn. Passenger revenue dropped 3.4% on capacity down 11.2%.BA blamed "additional finance costs and the impact of non cash foreign exchange movements" for its higher pre-tax loss.But chief executive Willie Walsh pointed out that the carrier's financial performance had actually improved during the quarter from underlying revenue increases and further cost reductions.If the impact of disruption during the period is taken out, passenger revenue would have increased by about 11% year on year, the company claims. All the well-publicised problems at BA, including industrial action and the closure of UK airspace following the Icelandic volcanic eruption, cost it £250m, as expected.Trends in both passenger and cargo traffic continue to be positive, with yields up and costs down. Operating costs were cut by 3.3% in Q1, fuel costs fell 0.7%, and other non fuel costs were down 4.3%. "While some economic experts are flagging the risk of a "double dip" recession, the steady recovery continues and, on that basis, we continue to target to break even at a profit before tax level for the full year as we move forward on our strategic objectives and continue to build on our excellent customer service," Walsh said Friday.The boss is also happy after US authorities last week cleared the airline's transatlantic tripartite with American Airlines and Iberia. Bay Capital