BA forecasts full-year operating loss of £150m

By David Kaminski-Morrow

British Airways is expecting to turn in a £150 million ($209 million) operating loss for the full year, and a £50 million operating loss for the third quarter.

The carrier's forecast follows an upward revision of non-fuel cost forecasts for the full year, which ends on 31 March.

British Airways is blaming the increase on economic weakness and a fall in the value of UK currency. It is expecting non-fuel costs to rise by 8% year-on-year, compared with a figure of 5% in previous guidance.

Revenue guidance for the year remains unchanged, at 4% up. It adds that its fuel costs are still expected to be "largely unchanged" at £3 billion, because lower fuel prices are being offset by currency and lower fuel hedging benefits.

Yields, it says, are more than offsetting a decline in traffic volumes which "remain in line with the market".

British Airways says its operating loss for the third quarter follows a £56 million non-cash charge relating to "retranslation of certain foreign currency obligations".