It now seems that British Airways has come forward and announced its first ever summer losses as it presented its interim management report for the six months to the end of September of this year. The report showed an operating loss of £111 million, which is being compared to the profit of £140 million that was seen during the same time last year.

This is the first time that British Airways has reported a loss in the first half of its financial year. Last year it reported a profit of £52 million during the same time span. The company made a surplus of £616 million in 2007. Thus, things do not seem to be going great for the airline.

Willie Walsh, the chief executive of British Airways, said that aviation as a whole remains in recession. The IATA is still predicting that the industry will lose about $11 billion this year alone. British Airways was very quick to respond to the crisis by taking out excess capacity and driving down costs. This demonstrates how well British Airways’ costs have been managed in the first half of the year. However, it is still imperative that the company continues to deliver these cost cutting plans into the second half.

Mr Walsh went on to say that the airline reduced its summer schedule capacity by 3.5 percent. Their costs are almost £400 million lower, and manpower has been cut by 1,900 through reduced overtime and voluntary redundancies. Either way, the airline industry does remain under continued pressure on yields, highlighting a significant shift within the industry as a whole. Thus, winter capacity will be cut by 6 percent as well, and more staff will have to be cut.