BA expects record loss leading to ‘permanent cost reductions’

British Airways (BA) is on track to make a record annual pre-tax loss despite a surprise operating profit of £25m in the three months to December, it has emerged.

BA’s pre-tax loss in the nine months to December 2009 rose to £342m, from £70m in the same period in 2008. With a further three months of the financial year to come, the airline is expected to exceed last year’s record loss of £401m.

The news comes as BA is locked in a High Court battle with union Unite, which claims it was never consulted over changes to cabin crew contracts. A result of a ballot later this month may show the airline is facing further industrial action, after the Christmas strike was cancelled by the courts.

The company said in a statement: “Our focus on permanent cost reduction must continue if we are to return the business to profitability in the short term.”

Chief executive Willie Walsh added the airline was working with staff, unions and trustees on ways to address a £3.7bn pension fund deficit. BA is also discussing a range of changes to future pension benefits, according to the Telegraph.

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