Fuel prices hurt British Airways’ profits
TEXT OF STORY
Stacey Vanek-Smith: We’ll how Wall Street reacts to that bad news from GM and BMW. As well as British Airways. The airline’s quarterly profits are down almost 90 percent. BA says expensive fuel is the culprit, as Jennifer Collins reports.
Jennifer Collins: Back in the 90’s, British Airways was the worlds most profitable airline. Remember this?
British Airways Ad: The world’s favorite airline brings 24 million people together.
These days, the aria’s over. British Airways made almost $600 million during the second quarter last year. This year, it’s down to a paltry $73 million.
Howard Wheeldon, an analyst at BGC partners in London, says the company has always tried to hedge fuel prices, but it’s just not working any more.
Howard Wheeldon: British Airways’ fuel bill will be 3 billion pounds sterling this year. That’s a whole 1 billion on last year. That’s a massive, massive ride.
BA expects to raise fares and cut 3 percent of its flights this winter.
I’m Jennifer Collins for Marketplace.
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