Hard times for the world's favorite airline.
We hope it endures. It was a blow to traveling civility when SwissAir closed shop.
Many fond memories of the day flight from JFK to Heathrow with the odd chance of an upgrade to the Concorde.
Still, there is always the upstrart Virgin and Branson's Heathrow Clubhouse. And First on Alitalia to Roma. La dolce vita! lol.
Do we lose the frequent flier mileage points in bankruptcy? Oh the humanity!
Reuters
British Airways debt cut to junk after profit warning
By John Bowker
Wed Feb 11, 2009
LONDON, Feb 11 (Reuters) - Moody's cut its debt rating on British Airways to 'junk' status in light of the airline's recent profit warning and future spending plans.
The agency said it expected BA's gearing to rise to more than six times earnings before interest, tax, depreciation and amortisation (EBITDA) after warning it would make an operating loss of 150 million pounds ($216.1 million) in the year to end March -- or a record 240 million pounds in this quarter alone.
It said BA had 5.3 billion pounds in cash and committed debt facilities, but that the majority of it was tied up in spending plans. BA's rating was cut from Baa3 to Ba1 -- the difference between investment grade and junk status.
"In light of stepped up capex planned in full year 2010 and the continued weak outlook for the industry as a whole, the company will be challenged to improve its credit metrics materially," Moody's said in a statement....
"The rating downgrade reflects extremely difficult trading conditions ... we continue to review all aspects of the business to further control costs and preserve our cash position," he added.
Wall Street Journal
British Airways Warns of Revenue Drop for Next Fiscal Year
By KAVERI NITHTHYANANTHAN
MARCH 6, 2009
British Airways PLC lowered its expectations for revenue growth in the current fiscal year and warned sales would fall next year as it cuts capacity in response to softening demand.
The British flag carrier said that in the current fiscal year, which ends March 31, it expects revenue to rise 3.5%, which compares with an earlier estimate of 4% growth. Next fiscal year, the airline expects revenue to decline 5%.
At its investor day on Thursday, BA said that fuel costs for this year will rise by £950 million ($1.35 billion). However, for the coming fiscal year, the airline expects fuel costs to decline 10%, thanks to hedging at levels lower than the peaks seen in the middle of 2008....
“Thus, it should be understood that when pro-US figures use the term, 'rules-based international order,' they are not referring to anything analogous to the rule of law. Quite the opposite, they are using Orwellian language to describe a system in which essentially no rules can be established and/or observed, given that the dominant state has the prerogative to violate and/or rewrite “rules” at its whim.” Aaron Good, American Exception