British Air Expected to Report Profit Slump

British Airways, Europe’s biggest airline, may announce a dividend cut for the first time when it reports another slump in earnings today, analysts said, though it also may say it will be profitable next year following a loss this year. BA’s pretax profit for the second fiscal quarter shrank to $11 million from $160 million a year earlier, analysts forecast, as passengers defected to rivals that cut prices and added extra seats over the North Atlantic. Revenue per passenger fell 6.2%, after a previous 5.8% slide, analysts said. “If they say things are getting any worse, there will be an avalanche of downgrades for 2001,” said Nigel Davies, an analyst at WestLB Panmure. BA is cutting jobs and slashing capacity as it heads for its first full-year loss since it was sold to the public in 1987. The carrier is under pressure to accelerate cost-cutting plans to convince investors it will be profitable in the year to 2001 and boost shares that are languishing close to six-year lows. On Friday, American depositary receipts of the carrier rose $2.38 to close at $52.88 on the New York Stock Exchange.