"slasher" Walsh Cuts £300 Million

[Rinrada]

Must stop calling him Willy Wonker.......thats for sure.

Is this the way ahead for the Sunshine Boys and Girls on The Board of Thai...?

Price hikes keep BA's Profits climbing...By Bryce Elder..(with thanks)

British Airways posted better-than-expected quarterly profit growth and raised its full-year sales forecast as higher ticket prices allowed the airline to shrug off higher fuel costs and industrial action.

Europe’s third-largest carrier said operating profit reached £261 million, up 6.5 per cent from the £245 million reported a year ago, thanks to higher passenger numbers, fuel surcharges on tickets and a recovery in demand for first- and business-class travel.

The profit beat analysts' expectations, which were centred at around £236 million.

It had previously forecast sales to rise between 5.5 per cent and 6.5 per cent.

BA's sales rose 8.2 per cent in the quarter to £2.21 billion.

These were the first quarterly figures since Willie Walsh became BA chief executive. He called the figures "a reasonable set of results". But he said they could have been better were it not .....etc

The airline added that passenger traffic bounced back last month, increasing by 6.4 per cent.

"We can do better and we will do better. The traffic figures we released today for October show that passengers want to fly with British Airways."

The airline left unchanged its forecast for an annual fuel bill of £1.67 billion. BA's fuel costs were up 51.3 per cent in its second quarter, having risen 37.6 per cent in the previous three months, as disruptions to supply and a shortage of refining capacity drove oil prices close to record levels.

BA has hedged 81 per cent of its fuel bill at $41 per barrel by purchasing oil futures contracts, Mr Walsh said. Crude-oil for November delivery was trading at around $63 a barrel in New York.

BA's quarterly pre-tax profits were £241 million, down from £293 million in the same periof last year, after new accounting rules changed the way it booked the sale of a stake in Australia's Qantas Airways

However this week......

'Slasher' Walsh takes the knife to jobs at BA

By Angela Jameson, Industrial Correspondent

WILLIE WALSH’S reputation for slashing jobs was upheld yesterday after the new chief executive of British Airways announced a cull of almost 600 senior and middle managers.

Just 58 days into his job at the head of Europe’s third-largest airline, Mr Walsh backtracked on a pledge to avoid compulsory redundancies and left workers in no doubt of his determination to get a grip on soaring costs at the airline.

“I made it clear last month that we needed to renew our drive on controllable costs. These measures will enable us to carry out the investment we need to make in our business to become more competitive,” he said.

“It’s never easy to lose people from the business but we must reduce our costs if we are to hit our goals,” he said.

Mr Walsh said that half of the job cuts would come from the ranks of senior management.

The remaining 503 staff, including about 300 middle managers earning average salaries of £45,000 a year, would leave in phases over the next two years in an overhaul of the airline’s management structure that is designed to cut costs by £50 million a year.

Shares in the airline rose by ¼p to 312p.

Mr Walsh denied that the surprise cull was a panic reaction to spiralling costs revealed in last month’s interim results, and said that the cuts were part of a previously announced plan to reduce the airline’s costs by £300 million.

(@bt. 2.15.BILLION)

Asked whether he was starting at the top of the organisation, in order to make redundancies amongst the rank and file of the airline more palatable to unions, he said: “It’s absolutely appropriate that I start at the very top of the business.”

Mr Walsh, who took over from Sir Rod Eddington on October 3, said that the redundancies would reduce duplication and increase accountability among BA’s management.

Mr Walsh arrived from Aer Lingus in May with a reputation for slashing jobs after he made drastic staff cuts to restore the troubled Irish flag carrier to profitability.

Dubbed “Slasher Walsh” he denied that he was trying to live up to this reputation.

http://business.timesonline.co.uk/article/...1898560,00.html

[solo siam]

Why dont the airlines just raise the price of their tickets instead of adding a fuel surcharge - seems sneaky to me. Also pisses me off that they charge a fuel surcharge at all, since they are buying fuel at a set hedged rate.

[Rinrada]

Nice little earner for these cowboys

Jesse James and Al Capone would have been proud of the way they operate the TAX system under the heading of...whisper.... SURCHARGES

Remember a few years ago there was no extras on an Airline ticket (or so we thought -well hidden..but) and then in came the the governments idea of internal flights charges (not taxes nasty word) with rates of approx £5 on internal routes,£10 to Europe and long haul a £20 spot.All to do with saving the planet etc...Yeahh..But since then How much is a ticket......well let me think .....

Its called a T-F-C.....Taxes ,Fees and Charges and they are tacked onto the basic.

But what are they exactly...for a start...

1.Air Passenger Duty (tax)

2.Local Airport Duty (tax)

3.Passenger Service Charge (tax)

4.Fuel Surcharge...nice one.....can up it easy.

5.Security Charge.

6.Insurance Surcharge....

7.Individual destination Surcharges--each way..

8.Booking Surcharge.

9.Credit Card Fee Surcharge....

10.Airline going bust-Surcharge

...need a wheelchair.........

...medical certificate-fit to fly......

...might need to borrow the oxygen mask......

...putting on a bit of weight there fella......

...O dear Madame......you appear to have EXCESS Baggage...Now that will be

and then you got to actually buy the ticket......but theres more to come

in the pipeline....

wee example ...

Fly From Bristol to Glasgow......

Easy Jet .TFCs= £10

B.A. TFCs= £40.................why?...softer seats....pink toilet paper..???

[Ricardo]

Definitely a lesson there for TG's board :-

TG hedge 31% of fuel and see profits slump mightily

BA hedge 81% of fuel and see profits hold-up & rise slightly

Cue for a song : "When will they ever learn, when ..."

[torrenova]

You can't hedge out indefinately. In the volatile market over the last 6 / 12 months hedge costs will have risen astronomically.

You couls actually see airlines having hedges out that are out of the money and that will have to be taken onto the balace sheet now under US GAAP.

[Ricardo]

The point is to have fixed their costs, before setting their prices, so that sudden changes in oil-prices don't catch them out.

Agreed that fixing, with fuel-prices then falling, will hurt. And that not fixing, when prices subsequently fall, can make very tasty profits in the short-term. But their excessive-profits are due to taking excessive-risks, which will eventually drive you out of business.

A similar case was Laker (good old Freddie) buying planes in dollars, not fixing his repayments at the then-Xrate, and seeing the cost of his planes double !

Wonder what the new gulf-based airlines pay for their fuel ?

[bluebear]

Definitely a lesson there for TG's board :-

TG hedge 31% of fuel and see profits slump mightily

BA hedge 81% of fuel and see profits hold-up & rise slightly

Cue for a song  :  "When will they ever learn, when ..." 

<{POST_SNAPBACK}>

A better lesson would be to divert all the vip pooying and pooyai who demand free upgrades and or seats on a full plane to the other thai national airline (RTAF )