BA considers a fundraising

CASH-strapped airline British Airways (BA) said it was exploring options to raise funds yesterday, as the firm&rsquo;s directors faced the wrath of its shareholders over controversial cost-cutting plans.<br /><br />Chairman Martin Broughton said at the company&rsquo;s annual meeting that BA was considering a convertible bond issue as a way of raising cash, while chief executive Willie Walsh said a rights issue had been considered and rejected.<br /><br />Walsh added that job and pay cuts were &ldquo;essential&rdquo; for the airline&rsquo;s survival.<br /><br />&ldquo;There is no point trying to skirt around the fact that we need a fundamental and structural change to our employee cost base,&rdquo; he told the gathered shareholders. &ldquo;These changes are essential to our short- term survival and more importantly to our long-term viability,&rdquo; he added.<br /><br />The airline is locked in talks with unions over measures to cut costs, after BA reported a record annual loss of &pound;401m earlier this year.<br /><br />Demand for premium tickets is tumbling in the downturn, and Walsh warned today that it may never return to pre-recession levels.<br /><br />&ldquo;There has been a structural shift in our premium markets. Fewer business travellers will choose the premium cabins, and those who do will pay less,&rdquo; he said.<br /><br />It also said it expects its pension-fund deficit to have grown by at least &pound;1.2bn since last September.<br /><br />Outside the meeting, staff protestors and trade union activists protested against pay conditions, while shareholders inside criticised Walsh for &ldquo;talking BA into the ground&rdquo; with his &ldquo;fight for survival&rdquo; campaign.