Crash landing for BA as profits plunge by 90%

British Airways profits have crashed by more than 90 per cent in "one of the bleakest" years in its history.

The airline said it made £52 million in the six months to the end of September compared with a record £616 million last year. It warned of "incredibly difficult" conditions and said it would struggle to do better than break even in the year as a whole.

British Airways chief executive Willie Walsh said the airline had been buffeted by a combination of setbacks. He said: "This is a good performance, given the incredibly difficult trading conditions. The six-month period will be remembered as one of the bleakest on record. The period was hit by a crisis in the banking sector, record fuel prices and several airlines going out of business."

The airline's fuel bill was up by half at £1.494 billion and will hit £3 billion for the year as a whole, although it should benefit from the falling oil price next year.

Mr Walsh said all management efforts were going into delivering "a small operating profit" this year.

However, one aviation analyst said he would be "extremely surprised" if BA made any profit at all this year. The carrier last made a loss in 2002 after a huge downturn in flying following 9/11.

As in 2001 and 2002 BA has been particularly hard hit by a sharp deterioration in the lucrative transatlantic business routes. The number of business executives flying Club or First Class between America and London has fallen dramatically as the banking crisis as worsened. Figures for last month released today showed the number of passengers "turning left" into the more expensive seats was down more than nine per cent on last year.

Mr Walsh said staff numbers and the route network were being cut to save money. More than 400 managers have taken voluntary redundancy and will leave BA at the end of the year. One aviation source said: "We are being flooded with CVs from BA people who need to get out."

Four routes are being cut from next summer's schedule. They are Heathrow to Dhaka in Bangladesh and Calcutta and Gatwick services to Dublin and Zurich.

On a bright note, Mr Walsh said that Heathrow's Terminal Five "is performing extremely well" after last year's disastrous start.

Aviation analysts said airlines faced a "long, cold winter" - with fares being slashed in a bid to encourage passengers to fly.

BA's poor results are the latest grim set of financial figures from some of Britain's biggest companies. Cut price rival Ryanair said this week that its first half profits were down 77 per cent and would only break even for the year as a whole.

On the high street Marks & Spencer announced first half profits down by 44 per cent, while banks HBOS, RBS and Lloyds TSB all warned of much lower profits.