BA announces record losses

London, England (CNN -- British Airways on Friday announced a record annual pre-tax loss of $765 million.

British Airways sees red as strikes loom

The losses are for the 12 months ending March 31, 2010, so they do not take into account losses incurred from the travel disruption caused by the volcanic ash cloud, or the latest threat of strike action by the union representing its cabin crews.
BA's pre-tax losses in the previous fiscal year were $577 million.
"Despite a £1 billion ($1.44 billion) drop in revenue during the year, our determined efforts on cost control mean that costs have reduced at a comparable level and our operating loss is virtually the same as in the previous year," BA Chief Executive Willie Walsh said in a statement.
BA's reputation in a tailspin
"To be in the midst of the biggest economic downturn in 60 years and produce the same operating figure as last year shows the hard work that has been put into steering our business through the recession."
Costs are down by £1 billion, equaling the drop in revenue, Walsh said. He criticized Unite, the union representing 95 percent of BA's cabin crew members, for standing in the way of further cost reductions.
"Returning the business to profitability requires permanent change across the company, and it's disappointing that our cabin crew union fails to recognize that," Walsh said.
Unite and BA have been locked in an acrimonious dispute over the airline's plans to reduce pay and change working conditions, including reducing cabin crew staff on some flights in order to save money. The union says the changes will hurt customer service and damage the BA brand.
The union staged two strikes in March over the issues, and it plans a series of three more, starting Monday.

Source: http://edition.cnn.com

Federal budget: $59 billion here, $300 billion there ...

Amid growing concerns about deficits, Congress will in coming weeks consider a bevy of measures that combined could increase the deficit by close to $500 billion over 10 years.

And that doesn't include the big kahuna on this year's agenda: extending the 2001 and 2003 tax cuts, which could cost anywhere from several hundred billion dollars to more than $2 trillion.
While it is expected that many measures will be paid for with revenue-generating provisions, the total cost of all that's on the table would not be fully offset. That's in large part because several measures are exempt from the new "pay-as-you-go" law.

Some of the measures have already been factored into 10-year deficit projections. But in a rough mid-term election year that has seen the eruption of a debt crisis in Europe, lawmakers on both sides of the aisle are becoming more sensitive to the optics of passing measures that are not paid for, even when many consider those measures essential.

The specific contents of the major bills under consideration are still being shuffled about. But several of the measures below are likely to make the cut in one form or another.

Extension of tax breaks: Dozens of tax breaks for businesses and individuals have lapsed. The cost of extending them for this year is $31 billion.

Such "tax extenders" include the research and development credit for businesses and the choice for individuals to deduct either their state and local income tax or their state and local sales tax.

Estate tax: Defying all expectations, Congress let the estate tax die at the end of 2009. But it's coming back in 2011. The question is at what level.

Unless Congress acts, starting next year no more than $1 million of a person's estate would be exempt from the estate tax -- which is well below the $3.5 million exemption in place last year. And the top estate tax rate would revert to 55%, up from 45% in effect last year.
President Obama has proposed permanently extending the estate tax at 2009 levels, which the Tax Policy Center estimates would cost $234 billion over 10 years.

In the Senate, however, a proposal to exempt $5 million and set the top rate at 35% has garnered some bipartisan support. Depending on how various parameters are set, the proposal could cost north of $300 billion.

Safety-net provisions for the unemployed: Some lawmakers are pushing to retain a program that extends the number of weeks an unemployed person may collect federal unemployment benefits. When combined with state benefits, under the program, that means a person can qualify for up to 99 weeks of benefits.

But the program expires in June. The measure under consideration would extend it to the end of the year.

Likewise, there's a proposal to extend the federal subsidy to help the newly unemployed pay for health insurance under COBRA. The subsidy is scheduled to expire at the end of May, so anyone who loses their job in June would not be eligible.

Combined, the two measures would cost close to $90 billion.

Aid to states: A proposal under consideration would provide $25 billion in federal aid to help budget-strapped states meet the increased demands for Medicaid services.

Funding for education jobs: Sen. Tom Harkin, D-Iowa, has proposed that $23 billion be appropriated to prevent states, suffering from steep budget deficits, from having to lay off teachers, principals, librarians and other school personnel.

War spending: Lawmakers are considering a request for $33 billion in supplemental war spending in Iraq and Afghanistan. It is expected to be included in a bill with other supplemental spending requests -- such as for disaster relief. All told, the supplemental spending requests would total $59 billion.

'Doc fix': Unless Congress acts, Medicare reimbursement rates for physicians will automatically be cut 21% come June 1 and by 1% to 6% in future years because of a pre-set formula that dictates Medicare outlays related reimbursements. Lawmakers are likely to override that scheduled cut for five years, at a cost of $89 billion.

Small business tax relief: President Obama has proposed excluding capital gains tax on small business stock purchased by individuals. So the tax break -- estimated to cost $2 billion over 10 years -- would help "angel" investors who take early stakes in fledgling, privately held companies.

2001/2003 tax cuts extension: There's been bipartisan support for extending the 2001 and 2003 tax cuts for the majority of Americans. If Congress doesn't act, they will expire after Dec. 31.

Extending them permanently would cost an estimated $2.2 trillion over 10 years.

It's not clear yet how long lawmakers might opt to extend the tax cuts, or if there will be enough of a push to also extend them for high-income households. Both parties have favored making the cuts permanent, at least for most Americans. But of late some believe extending them for a year or two may be the smartest move given current political and economic constraints.

Indeed, last week conservative economist Martin Feldstein, who was President Reagan's top economic adviser, said in a Wall Street Journal editorial that while he favors temporarily extending the cuts for everyone, the country can't afford to make them permanent.

"Changing the Obama budget proposal to limit all tax cuts to two years would reduce the total deficits over the next decade by more than $2 trillion. No single policy change could do as much to limit the future deficits and the national debt," Feldstein wrote.

Source:http://money.cnn.com

Savannah Bank Nigeria assures customers that they will not lose their deposits.

By ONYINYE NWACHUKWU

Savannah Bank would be allowed to lose monies deposited with it since eight years the bank went into crisis, its authorities assured on Thursday.

The assurance follows the bank’s ongoing preparatory activities to re-enter the Nigerian already competitive market. The bank said it would roll out a definite plan soon expected to herald its commencement of operations but that it’s been taking stock and carrying out some verification exercise since February, with about 90 percent of the process already concluded.

The bank also announced that it was sourcing investments, locally and internationally, even though it further assured that the required take-off capital would not be a problem. Richard Abrahams, chairman of the bank’s board of directors, is leading part of the team searching for investors, it was learnt.
Meanwhile, the bank said it would not whenever it commences operations go into regional banking according to CBN’s plan to phase out universal banking and also disclosed it would retain its name, although the logo may only be modified.

Savannah Bank was shut down in 2002 following claims by the Central Bank of Nigeria (CBN) that it was unable to meet some of its obligations and on October 20, 2006, a Federal High Court in Abuja ruled that CBN’s closure of the bank was legal.

But last year, the bank regained its operating licence after another court ruling in its favour. On the present position of the bank, Obi Adiele, the bank’s temporary spokesman, told reporters in Abuja of ongoing efforts to quickly bring the bank back to business, and confirmed the interests of a lot of investors, considering the bank’s assets and particularly the gains of investing in an already established institution rather than floating an entirely new one.

He said any interests to be paid on the deposits would be determined by the CBN. “What we are saying is that all the people who deposited money in Savannah Bank will have their money back. We are going to do deposit verification exercise where depositors will be needed to present their driver’s licence or international passport and then with their account details, their accounts will be activated.

“…But may be if you have N2 million, we may not allow you take it at once because of the rush on the bank. We can now plan a proper exit strategy where gradually you have access to all your money. But clearly, no depositor will lose his or her money unlike some banks that went into liquidation.”

Speaking further on the plans on ground, he said, “Right now the bank is taking stock. We started the verification exercise in February 2010 and before the end of the year, we would have been through with most of the verification.

“Gradually, we are verifying our depositors so that we will now ascertain our level of indebtedness to them, then the next stage we will go into now will be to regularise their account by rolling out the branches in Abuja, Lagos, Kano, Port Harcourt, Enugu that is more like a regional roll-out.”

Sources: www.businessdayonline.com