British Airways is warning of a ₤50 million earnings hit in the quarter ended Dec. 31, the third quarter of its fiscal year, because of snow-induced travel disruptions in Europe. The fourth quarter also likely will see a slight impact.
The airline, along with many rivals, was forced into several days of cancellations because of disruptions at London Heathrow and other airports. The cancellations depressed capacity by about 12% year-over-year, the airline reports in its December traffic figures.
BA also is keeping a close eye on fuel costs, and already has reintroduced fuel surcharges. Speaking on the sidelines of an Imperial College London forum on green aviation, airline CEO Willie Walsh notes that fuel prices still are broadly in the band the airline has been expecting, even if at the high end. BA has been projecting that, long-term, fuel prices will be around $80-100 per barrel. Walsh believes, though, that the current level, around $95 per barrel, is partly driven up speculatively and may not be sustained.
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