BA boss sees tough times ahead

ROD Eddington, chief executive of British Airways, has issued his grimmest warning yet about the airline's prospects.

He told senior executives from BA and the Spanish carrier Iberia that some European airlines would not be able to survive the present slump in passenger numbers.

'I would like to think the worst times are over, but it is going to be a very difficult winter,' he said in Madrid.

'Demand has not reached the levels of two years ago and we do not expect that the revenues will recover immediately. There will be some companies that will not be able to survive the crisis. Things are really bad on both sides of the Atlantic.'

In an unprecedented move, the BA boss took his entire board to Madrid for the meeting with their counterparts at Iberia.

Eddington made it clear that the Spanish airline, where BA has a 9% stake, is his first choice as a merger partner.

He told them: 'If we had to choose a partner for a bigger integration in the future, it would be Iberia.'

His warning came as the latest figures from National Air Traffic Services showed that passenger numbers across the Atlantic, vital to BA's profits, were down by 4% on levels before the 11 September attacks on the US.

There are fears that if the slide in business at BA continues, Eddington will have no alternative but to cut more staff on top of the 13,000 already announced.

BA suffered a £45m pre-tax loss for the first quarter to June, and since then there has been a strike over staff swipe cards that cost the airline £40m.

BA now faces a new challenge after last week's merger of Air France and KLM. Eddington will want to ensure that the new Franco-Dutch alliance will be subject to the same scrutiny as BA's failed attempt to merge with American Airlines.