Could British Airways really go under?
If you listen to British Airways chief executive Willie Walsh you may be under the impression that the company is on the edge of a precipice and could go out of business unless there is a swift turnaround in the travel industry. However, many people believe that British Airways is painting as bad a picture as possible in order to extract additional funding from its banks and assistance from employees. But is this really the situation?
Behind the mask there is serious concern about British Airways because the UK banking sector apparently accounted for around 40% of the company's business class traffic. This premium area of the business is where the profits are made even though it has come under significant pressure over the last few years. The company is also in the process of asking employees to work extra time for no pay as a gesture of goodwill in these times of economic hardship. Indeed, the chief executive himself has already agreed to work for a full month without any pay.
It seems almost inconceivable that a company such as British Airways could be in financial trouble although there is no doubt that the industry is still under a significant cloud.
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