Strike adds £30m to BA gloom

THE Heathrow swipe card dispute has already cost British Airways up to £40m and was 'terrible' for the company, its boss admitted today.

Chief executive Rod Eddington, who was reporting record firstquarter losses, said: 'Clearly the disruptions at Heathrow two weekends ago were terrible for customers, terrible for our staff and terrible for our business. We've got to rebuild our business, our relationship with our customers and restore trust where it broke down with our people.î

Speaking on BBC radio's Today programme, Eddington conceded 'with the gift of hindsight' the timing of BA's decision to introduce the swipe card system was not good. He repeated his warning that the company could go under if it does not improve its efficiency.

He said: 'We have no God-given right to survive, but we have done more than any other carrier in Europe over the last two years in restructuring our cost base. That is the road to survival.'

BA has already laid off more than 11,200 staff since 2001 and is looking at cutting a further 1800 posts. The airline made a £45m pre-tax loss in the three months to end June, its worst ever performance in the usually highly profitable first quarter. In a good year it would hope to make a pretax profit of around £150m in the same period. The damage was wreaked by a slump in revenue of almost 12%, one of the biggest falls suffered by the airline.

He blamed the Sars virus, which emptied flights between London and the Far East, as well as the war in Iraq and its aftermath for much of the downturn. Eddington described the time as 'the most testing period in aviation history'.

The loss, though slightly smaller than the City's worst fears, means BA is almost certainly heading for a deep fall into the red for the year as a whole. Some analysts are now braced for a deficit of up to £200m, equalling its worst since privatisation in 1987.