British Airways has appointed Rod Eddington, executive chairman of
Australia’s number two airline Ansett and a leading executive in Rupert Murdoch’s
News Corporation, as its new chief executive, filling the gap left by last
month’s surprise departure of Bob Ayling. Eddington, who will take on the role
on 1 May, faces a tough challenge and one of his earliest tasks will be to
announce BA’s first pre-tax loss since privatisation 13 years ago.
Profitability at BA, the world’s biggest international airline, has plunged in
the past two years and its operating results remain under pressure from excess
industry capacity. Analysts are forecasting a pre-tax loss of up to £125m for
the financial year to the end of March, down from a profit of £225m a year
earlier, with a forecast pre-tax loss before gains from disposals of as much as
£385m. FT.com
On-line retailer restores Net faith with report
Amazon.com, the largest on-line retailer, surprised analysts on Wednesday
night by predicting it would report positive operating cash flow over the
remaining three-quarters of this year, far sooner than expected. In its latest
effort to focus nervous investors’ attention on future profitability rather
than on current losses, Amazon said its US books, music and video business
would record pro forma operating profits for the full year. Chief financial
officer Warren Jenson noted that Amazon is "well placed to deliver on our
2000 plans", with $1bn of cash. FT.com
Profits-drop for BAT after disappointing quarter
British American Tobacco last week reported a steep drop in pre-tax profits
following larger than expected exceptional costs as it revealed first-quarter
figures well below expectations. Pre-tax profits fell 29 per cent to £220m, far
below analysts’ expectations of more than £400m. Exceptional charges relating
to the restructuring of Imasco, BAT’s Canadian subsidiary, and the acquisition
of SCA Tobacco in Japan, were higher than expected, reaching more than £230m.
They included £80m from re-acquiring cigarette stock sold to SCAT before the
acquisition, as well as £67m of costs relating to the Imasco restructure and
£85m of goodwill amortisation. FT.com
