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Failure in aviation sector, profit of BA is exhausted |
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Saturday, 02 August 2008 |
Another bad news for the aviation sector was presented to investors in the UK. After the big drop in profits to low tariff carrier Ryanair became clear that the high class service is not escaping from the record prices of fuel - the official carrier of Great Britain British Airways profit decreased by 88 percent for the first quarter of the new financial year.
The company provides closure to some of the lines during the next winter season, and a considerable reduction in costs in order to overcome the surge in prices due to fuel problems transmit FT. Currently we are in the worst trade situation with which the industry has ever encountered, says the executive director of BA and added that the combination of unprecedented oil prices, slowing economic growth and weak consumer confidence led to a significant decrease in profits for the first quarter.
Profit before taxes fall of the carrier with impressive 88 percent from 298 million liras reported for the first quarter of financial year 2007 to only 35 million liras for the same period in 2008. This makes for a company to reduce shipments by 3.1 percent during the winter, which also represents a decrease of 6.4 percent compared to the earlier pledged during the year development plans.
During the period April-June 2008 fuel costs to the VA increased by 49 per cent (233 million liras) in a total of 706 million liras. Situation of oil market makes the company's managers expect growth of over 1 billion to 3 billion liras for the full financial year ending March 31, 2009.
Bad news for the company led to a decline in market capitalization of 2.64 percent at the beginning of today's trading session at 248,50 pens per share . |
Finances and Markets 
