Jaunted

Airlines

British Airways Earnings Socked By Oil, Plans to Give Fuel-Efficient Jets a Try

August 3, 2008 at 1:35 PM | 0 Comments

British Airways reported an 88% dip in its quarterly profits on Friday, just as it entered talks to broker an alliance with American Airlines and an acquisition of Iberia Airlines. The aggressive moves come in response to soaring oil prices and a global economic downturn that has tamped down demand and left several airlines in bankruptcy.

The upshot here is that consumers will see higher prices and a few canceled routes. It also makes the 2010 delivery of BA's six new Boeing 777-300ERs all the more crucial, as they represent a 23% improvement in fuel efficiency compared with the airline's fleet of 747s. I don't know how much more efficiency you can squeeze out of jet engines, but 23% seems like a good starting point. Let's hope the next generation of jets is even more parsimonious with the juice.

If U.S. carriers are experiencing the same pains that BA suffers from, it looks like airfares will be rising across the board. This isn't good news for travelers, of course, but people who are serious about seeing the world will always find a way.

Related Stories:
· Oil Price Rise Hits British Airways Q1 Profits [BusinessWeek]
· BA Close to American Alliance [BBC News]
· Airline Coverage [Jaunted]

[Photo: BBC News/Getty]