=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/05/19/f= inancial0805EDT0014.DTL ---------------------------------------------------------------------- Monday, May 19, 2003 (AP) BA returns to full-year profit but difficulties ahead MICHAEL McDONOUGH, Associated Press Writer (05-19) 05:05 PDT LONDON (AP) -- British Airways PLC overcame widespread gloom in the airline industry by announcing a return to full-year profit Monday, but heavy fourth-quarter losses suggested tough times lay ahead. The carrier said a drive to slash costs, including a program to shed thousands of jobs, had helped it counter falling ticket sales amid concerns about terrorism, the SARS virus and conflict in Iraq. "It's been a good effort by everyone in the company in a very challenging year," chief executive Rod Eddington told British Broadcasting Corp. radio. "It's very difficult worldwide for the industry, and we've had to fly into a very stiff headwind." BA announced net profits of 85 million pounds ($136 million) in the year ended March 31, compared with a net loss of 129 million pounds in the 12 months ending March 31, 2002. It increased earnings despite a fall in yearly revenue to 7.69 billion pounds ($12.30 billion) from 8.34 billion pounds. However, the company lost 200 million pounds ($320 million) before taxes in the first three months of 2003. That equaled pretax losses for the whole year ending March 31, 2002, when BA recorded its biggest yearly deficit since privatization in 1987. In the quarter, the company also spent 84 million pounds ($134.4 million) on retiring Concorde, the supersonic jet due to go out of service by late October. "The last three months have been particularly difficult," Eddington said, citing the Iraq war, the SARS epidemic and fear of terrorist attacks. "Our revenue line is under pressure, as it is for every airline. All we can do is manage and control the things we can control, elements of our cost base that are within our gift." BA has cut 11,880 jobs since August 2001 and plans to shed almost 3,000 more by March next year as part of its cost-reduction strategy. BA shares slipped to 135.50 pence (216.80 cents) in trading late Monday morning on the London Stock Exchange, down from 143.25 pence (229.20 cents) late Friday. Eddington confirmed that Concorde's retirement would be permanent, despi= te interest from Richard Branson, the chief executive of rival carrier Virgin Atlantic Airways. BA says its Concordes aren't for sale, and Airbus, which services the planes, says high costs make it unrealistic to continue doing so. Air France, the only other company to fly the needle-nosed jets, is also retiring its fleet. "Both Airbus and ourselves came to the same conclusion, that, sadly, it was time to retire Concorde," Eddington said. "The end of October is it." =20 ---------------------------------------------------------------------- Copyright 2003 AP