BA plummets £150m into the red

BRITISH AIRWAYS admitted this afternoon that it expects to lose £150million this year.

The company is being pushed deep into the red because of the recession and the collapse in sterling.

Shares in BA slumped six per cent, or 8.3p, to 137.9p.

It marks a dramatic decline in the airline's financial health since its half-year results in early November when it said it hoped to make "a small profit".

The airline has been hit by a sharp fall in numbers of high-spending Club and first-class passengers.

There has also been a surge in costs such as European and US airport charges at the same time as the slump in sterling.

In a statement to the Stock Exchange, BA said: "Further economic weakness in January and the outlook for February and March combined with the fall in sterling are impacting on our outlook for the year."

Overall, BA's non-fuel costs are expected to rise by eight per cent, while fuel costs will not fall, despite the plunging oil price, because BA had paid for much of its fuel in advance at higher prices.

The third quarter of the year alone saw a £50million loss, the airline said.

The warning comes on another bleak day for jobs. Corus confirmed it is shedding 2,500 jobs in Britain while Dutch electronics firm Philips and bank ING said job cuts may include British staff.

Administrators were appointed to shoe chains Barratts and PriceLess.