BA set to cut back on soaring costs

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British Airways said it lost £70 million in the first nine months of its financial year as it saw costs rocket to £7 billion.

The airline confirmed it was talking to staff unions about "pay and productivity" as it looks to slash soaring costs.

It reported a £1 billion increase in costs after it was hit by last year's record fuel prices and more recently the weakness of the pound.

BA's nine-month pre-tax loss of £70 million compared with a profit of £816 million a year ago.

BA warned last week that it expected to report full-year operating losses of around £150 million following the slump in sterling.

Fuel costs rose 50% to £2.2 billion and non-fuel by £335 million to £4.7 billion, hit by currency movements.

BA has already taken action to cut costs, shedding a third of its management team - 478 staff - at the end of last year.

It said there were not likely to be widespread job losses across its 42,000 workforce, but the group is leading a voluntary redundancy programme and is holding talks with unions about how to increase efficiency and cost savings.

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It declined to reveal how many posts would be affected.

BA chief executive Willie Walsh said the results reflected the economic weakness and fall in sterling.