Web posted at: 10/5/2005 9:40:38

Source ::: Reuters

LONDON: British Airways’ new boss said yesterday the airline would not achieve a key profitability goal this year and flagged a £100m ($175.7m) investment on in-flight products to win back long-haul customers.

Chief Executive Willie Walsh also said the carrier planned changes to some loss-making short-haul operations and said his priority would be ensuring the airline had a smooth transition to a single terminal at London’s Heathrow Airport by 2008.

Walsh said the carrier would not achieve its goal of a 10 per cent operating margin, a target set by his predecessor, this year due to record high fuel costs.

“I do believe it is achievable. With fuel prices where they are we clearly are flying into very significant headwinds ... I don’t have a date in mind when we will achieve it,” Walsh told reporters on a conference call, adding it would not be this year.

The airline achieved a 8.5 per cent operating margin in the first quarter of the current year.

Walsh, former boss of Irish national carrier Aer Lingus, replaced outgoing chief Rod Eddington to head Europe’s third-largest airline over the weekend. He said the airline planned to invest £100m on new business-class seats and in-flight entertainment, with an announcement due in the next few months. Walsh also said there would be changes at the airline’s regional short-haul business.