Friday, July 3, 2009

British Airways: What more can be done to save money?

British Airway PLC grounded aircrafts, cut seat numbers and postponed the delivery of 12 new A380 Airbus to save money. In June 2009, the airline carried 2.93 million passengers which was 5% lower compared to the figure of June 2008. The airline is going to cut 3,500 jobs and freeze payments. Already, the BA administrations went into talks with the union but nothing happened. Further discussions are going to be held in the coming weeks. reports:

BA said that in response to the "challenging economic conditions" it was cutting its summer capacity by 3.5 percent, rather than the originally forecast 2.5 percent. Capacity for October through March 2010 is expected to be down by 5 percent.

British Airways’ planes were 79.6% filled up in June 2009 which was 81.4% in 2008. In such “challenging economic conditions,” the airline is taking all necessary steps to cut costs. The airline is also grounding three Boeing 757 aircraft in the middle of next year and three Boeing 747-400s this coming winter. British Airways also postponed the delivery of its first six A380 airbus that were supposed to come in 2012. The rest six planes will arrive within 2016.

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Teck Resources is selling its stake to China Investment Corporation

In order to reduce its debts, Vancouver based Canadian mining company, Teck Resrouces Ltd., is selling its 17% stake to China Investment Corp. (CIC) for $1.5 billion. Out of this money about $10 million will be used to clear bank debt. Currently, the sale is waiting for regulatory approval and it will be closed on July 14, 2009.

CIC is buying Teck Resources 101.3 million class B voting shares. CIC would also invest in the company’s future projects. In June 2009, Teck Resources sold its

one-third interest in Waneta Dam to BC Hydro for $710 million. The company also collected funds worth $700 million by selling its top assets.

In July 2008, Teck Resources acquired Fording Canadian Coal Trust for $9.8 billion but after the deal was done product prices went down and hurt the company’s profitability. In early 2009, Teck Resources was exempted a portion of its debt. The company is also looking for a partner to invest in its coal business.

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