British Airways (LSE: BA) lost ₤375 million ($595 million) in the 12 months ending March 31, 2009. This is down from a profit of ₤712 million ($1.1 billion) the year before. The airline, which was privatized in 1987, has never sustained a loss this great. As a result, British Airways will not pay any dividends to shareholders -- or bonuses to the management team.

Weaker demand and spikes in fuel costs are cited as the reasons for the year-over-year record loss. Revenue was up 2.9% (₤8.99 billion) year-over-year, but this was not enough to offset a 45% increase in fuel costs -- to ₤2.97 billion. Demand problems struck in the fourth quarter, with revenue dropping 8.4% to ₤1.9 billion.

Its previous record loss was ₤200 million for the year ending in 2002.

MOST NOTEWORTHY: American Eagle, Hologic and British Airways were today's noteworthy downgrades:

• Friedman Billings downgraded American Eagle (NYSE: AEO) to Underperform from Market Perform citing slowing top-line growth, difficult macro-environment, and the challenging women's category.
  
• Soleil cut Hologic (NASDAQ: HOLX) to Hold from Buy as it believes the cancellation of the FDA Radiological Devices Panel means a further delay in the tomosynthesis pre-market approval application.
  
• ABN downgraded shares of British Airways (Other OTC: BAIRY) to Sell from Hold as it believes the recent rally in the face of higher oil prices is unjustified. Shares were also lowered at Deutsche Bank to Sell from Buy as it believes the company may not be able to raise ticket prices enough to offset higher fuel costs.

OTHER DOWNGRADES:

• ArthroCare (NASDAQ: ARTC) was cut to Accumulate from Buy at ThinkPanmure.
  
• ING downgraded J Sainsbury (Other OTC: JSAIY) to Sell from Hold.
  
• RBC Capital downgraded Ceragon Networks (NASDAQ: CRNT) to Sector Perform from outperform.

In a move that may be imitated by large US carriers like AMR (NYSE: AMR), Delta (NYSE: DAL) and Northwest (NYSE: NWA), British Airways will ground part of its fleet to save money because of the rising cost of fuel.

According to The Times of London, "The airline would park its oldest, least fuel-efficient aircraft."

Analysts are concerned that British Airways may loss money for the next two years. By taking some aircraft out of service, the carrier could ameliorate some of that.

Wall Street may watch to see if big American companies have the sense to do the same thing. Most have debt loads large enough to move them toward Chapter 11, if fuel costs stay high and a rough economy hurts passenger traffic. Major airline mergers, some of which are fairly far along, will not solve the gas price problem. Taking jets out of service may, at least in part.

Douglas A. McIntyre is an editor at 247wallst.com.

MOST NOTEWORTHY: First Financial, TriZetto and General Electric were today's noteworthy downgrades:

• Keefe Bruyette downgraded shares of First Financial (NASDAQ: FFBC) to Underperform from Market Perform on valuation, as they believe the stock trades at a premium to the group despite limited upside to normalized earnings and near term revenue headwinds.
  
• TriZetto (NASDAQ:TZIX) was cut at Jefferies to Hold from Buy based on Friday's go-private announcement, as they view the $22 deal price as fair.
  
• General Electric (NYSE: GE) was downgraded to Peer Perform from Outperform at Bear Stearns and to Perform from Outperform at Oppenheimer following the company's earnings miss and reduced guidance.

OTHER DOWNGRADES:

• Deustche Bank downgraded SPX Corp (NYSE: SPW) to Hold from Buy.
  
• Morgan Stanley cut British Airways (OTC:BAIRY) to Underweight from Equal Weight.
  
• Cymer (NASDAQ: CYMI) was lowered at Credit Suisse to Underperform from Neutral.

MAJOR PAPERS:

• In an effort to increase sales in the Middle East, the Wall Street Journal reported that Dell Inc (NASDAQ: DELL) is in talks with a government-owned vehicle in Dubai called Tecom about establishing a joint venture.
• The Wall Street Journal also reported that Washington Mutual Incorporated (NYSE: WM), which obtained a $7B capital infusion from TPG and other investors, had reportedly been working on the TPG deal while negotiating with JP Morgan Chase & Co (NYSE: JPM), which made a preliminary takeover bid of about $7B, people familiar with the deal said.
• Citigroup Incorporated (NYSE: C) is close to reaching a deal to sell $12B in leveraged loans at a discount to a group of leading private equity firms, the Financial Times reported. Although details of the deal were still being worked out, inside sources said Apollo Management, The Blackstone Group LP (NYSE: BX) and TPG would buy the loan portfolio at a discount that could come in at about 90 cents on the dollar.

OTHER PAPERS:

• The UK Times reported that The Boeing Company (NYSE: BA) is today expected to announce that its 787 Dreamliner has been delayed by 18 months, a setback which will affect all airlines that have ordered the 787, including British Airways Plc (OTC: BAIRY) and Virgin Atlantic.

MOST NOTEWORTHY: Brokers and asset managers, Credit Suisse, Barclays and HBOS PLC were today's noteworthy downgrades:

• Lehman downgraded the brokers and asset managers sector to Neutral from Positive and Merrill Lynch (NYSE: MER) and Bear Stearns (NYSE: BSC) to Equal Weight from Overweight. The firm cited weakness in the credit markets for the Bear Stearns downgrade and potential further write downs at Merrill Lynch for its downgrade.
  
• Bear Stearns downgraded shares of Credit Suisse (NYSE: CS) to Peer Perform from Outperform as they see risks to 2008 estimates from an expected decline in investment-banking revenue.
  
• Barclays (NYSE: BCS) was downgraded to Underweight from Neutral and HBOS PLC (OTC: HBOOY) was downgraded to Underweight from Overweight at HSBC to reflect the potential for higher write downs on debt securities and slower revenue growth.

OTHER DOWNGRADES:

• British Airways (OTC: BAIRY) was downgraded to Sell from Hold at ABN Amro.
  
• Merrill downgraded British Sky Broadcasting (NYSE: BSY) to Neutral from Buy.
  
• Merriman downgraded Zoran (NASDAQ: ZRAN) to Neutral from Buy.
  
• Deutsche Bank downgraded Home Depot (NYSE: HD) and Lowe's (NYSE: LOW) to Hold from Buy.

MAJOR PAPERS:

• In a potential breakthrough for Google (NASDAQ: GOOG) , Verizon Communications (NYSE: VZ) and Vodaphone Group's (NYSE: VOD) Verizon Wireless, and Sprint Nextel Corporation (NYSE: S) are both in talks about Google's new mobile phone operating system, reported the Wall Street Journal (subscription required).
• Congress approved a seven year extension of ban on Internet tax, voting 402-0, and President Bush is expected to sign the bill, according to the Wall Street Journal.
• Stan O'Neal may be gone, but the SEC's enforcement staff is now looking at how Merrill Lynch (NYSE: MER) informed investors about its $8.4B write-down that forced O'Neal out, reported the Wall Street Journal.
• CLP Holdings (OTC: CLPHY), Hong Kong's largest power company, is planning to bid for electricity assets in Australia, India, Singapore and other countries in Southeast Asia, reported the Financial Times (subscription required).

OTHER PAPERS:

• The Star reported that life insurance company Manulife Financial Corporation (NYSE: MFC) is open to making acquisitions in Malaysia if suitable opportunities in the country arise, according to Manulife's senior executive vice-president and general manager for Asia, Robert A. Cook.
• The U.K. Times reported that British Airways' (OTC: BAIRY) plans to create a new airline offering flights between Europe and New York have been thrown into disarray after the Federal Aviation Administration threatened to block any increase of air traffic into New York's chronically congested JFK Airport.

British Airways (OTC: BAIRY) ordered $8.2 billion worth of new airplanes including 24 Boeing (NYSE: BA) 787 Dreamliners and eight Airbus super-jumbo A380s. As Reuters points out, it ends the airline's exclusive use of the 747 as its large passenger plane. The aircrafts will be delivered between 2010 and 2014.

British Airways said that there was no political pressure to buy from Airbus, which has complained to the WTO that Boeing gets money from the US government to underwrite its development. The claim is that this help comes in the form of military contracts.

So, is this a win or loss for Boeing?

The news is probably bad for the U.S. company. It lost its exclusive 747 franchise with British Airways, one of the world's largest carriers. Although Boeing got a large order for its Dreamliner, the British Airways move gives the Airbus super-jumbo A380 new life. Development of the plane has been repeatedly delayed giving Boeing the chance to market the new stretch version of the 747.

There may never been an answer to the question of whether there's pressure on European airlines to buy from the "local" Airbus. But, the perception will linger that the EU members may be willing to help one of their own.

Douglas A McIntyre is a partner at 24/7 Wall St.

MAJOR PAPERS:

• Bear Stearns Companies Inc (NYSE: BSC), already forced to shut two hedge funds that bet heavily on the risky subprime-mortgage market, is now facing big losses in a third fund that has roughly $900 million in mortgage investments, according to people familiar with the matter, reported the Wall Street Journal (subscription required).
• Three months after announcing that it may sell itself to Morgan Stanley (NYSE: MS), Crescent Real Estate Equities Company (NYSE: CEI) is expected to move ahead with the $2.9B sale for its exit from the public market, reported the Wall Street Journal.

OTHER PAPERS:

• According to people familiar with the matter, Dow Chemical Company (NYSE: DOW), the largest chemicals group in the U.S., is considering making a counter-bid for ICI, which has a GBP7.8B bid from Akzo Nobel (NASDAQ: AKZOY), reported the Telegraph.
• The Telegraph reported that British Airways (OTC: BAIRY) has agreed to pay a fine of GBP121.5M to the U.K.'s Office of Fair Trading and will also pay a fine to the U.S. Department of Justice because of its involvement in an alleged price-fixing scandal.

WEBSITES:

• Home Depot Inc (NYSE: HD) has fired four purchasing managers for their involvement in a purchasing scandal involving millions of dollars in kickbacks regarding the display of flooring products, reported CBS News.

Hoorah, now that this earnings period is starting to wind down, I can highlight some non-earnings events to look out for next week.

Monday May 14

• Hitachi Ltd (NYSE: HIT) Strategic Storage Announcement conference call at 8am.
• Aircastle Limited (NYSE: AYR) to report Q1 earnings; conference call at 11am.
• Another Vioxx trial starts for Merck and Co Inc (NYSE: MRK) in Texas.

Tuesday May 15

• Motorola Inc (NYSE: MOT) mobile experience at 10am.
• Yamana Gold Inc (NYSE: AUY) to report Q1 earnings; conference call at 11am.

Wednesday May 16

• Southwest Airlines (NYSE: LUV) shareholder meeting at 11am.
• Hewlett-Packard Company (NYSE: HPQ) to report Q2 earnings; conference call at 5pm.

Thursday May 17

• JC Penney Company Co Inc (NYSE: JCP) to report Q1 earnings; conference call at 9:30am.
• Liz Claiborne Inc (NYSE: LIZ) annual shareholder meeting at 10am.
• Biogen Idec (NASDAQ: BIIB) research and development day at 8:30am.

Friday May 18

• British Airways (NYSE: BAB) to report preliminary Q4 earnings; conference call at 9am.
• Federated Department Stores Inc (NYSE: FD) shareholder meeting at 11am.

MAJOR PAPERS:

• Online ad firm DoubleClick is exploring a sale, and is in talks with Microsoft Corporation (NASDAQ: MSFT), among others, reported the Wall Street Journal (subscription required).
• The Financial Times (subscription required) reported that BP plc ADS's (NYSE: BP) Russia venture, TNK-BP, abandoned its bid for a stake in Rosneft less than ten minutes into bidding, leaving Rosneft able to buy its own shares back at a 10% discount.
• According to the Financial Times, Tyco International Ltd (NYSE: TYC) bondholders are worried the company may try to avoid paying them in full when the company completes its break-up later in the year.
• The Financial Times reported that Cadbury Schweppes ADS (NYSE: CSG) CEO Todd Stitzer said a merger with Hershey (HSY) would make "commercial, strategic and financial sense" for Cadbury, which is preparing to split into two divisions.

OTHER PAPERS:

• The U.K. Times reported that British Airways ADS (NYSE: BAB) is considering making a GBP1B bid for bmi, a competing British airline.

WEBSITES:

• BusinessWeek Online reported that Beazer Homes USA Inc (NYSE: BZH) is being investigated for potential mortgage fraud by the FBI.
• CNet.com reported that Yahoo! Inc (NASDAQ: YHOO) will offer unlimited email storage beginning in May, according to an announcement by the company.

AMR Corp. (NYSE:AMR), the parent of American Airlines, may be the latest company to go private, according to BusinessWeek.

People familiar with the matter told the magazine that the bid of British Airways and Goldman Sachs Group (NYSE:GS) would between $46 and $52 a share or $9.8 billion to $11.1 billion. That's well above the $38.57 where AMR's stock is trading today. Other sources told Reuters that the two companies have "no current plans" to bid for AMR.

Translated that means that the price being floated by the people speaking to BusinessWeek is wishful thinking. Can you say trial balloon?

AMR, whose shares are up on the BusinessWeek report, lately has been on a roll. The company reported better-than-expected fourth quarter results because of lower fuel prices. Its stock has almost doubled over the past six months.

In other words, it's coming into a potential merger from a position of strength. Of course, airlines have soared and plummeted on Wall Street for years, so there's no telling how long the good times will last.

MOST NOTEWORTHY: Travelzoo Inc (TZOO) and Cisco Systems Inc (CSCO) topped today's list of noteworthy upgrades:

• Travelzoo Inc (NASDAQ: TZOO) was upgraded to Strong Buy from Underperform with a $38 target at First Albany based on valuation and the potential for significant upside in first quarter. Stifel upgraded Travelzoo to Hold from Sell, also on valuation.

• Following the company's Q2 results and guidance, Baird upgraded shares of Cisco Systems Inc (NASDAQ: CSCO) to Outperform from Neutral with a $32 target.

OTHER UPGRADES:

• AG Edwards upgraded shares of Marriott Int'l Inc (NYSE: MAR) to Buy from Hold with a $56 target. The firm believes that given recent indications of sulid industry fundamentals, Marriott is being overlooked. In addition, AG Edwards believes Marriot is poised to report strong earnings on Thursday.

• Broadcom Corp (NASDAQ: BRCM) was upgraded to Overweight from Equal Weight with a $40 target at Morgan Stanley.

• FEI Company (NASDAQ: FEIC) was upgraded by Credit Suisse to Neutral from Underperform following its Q4 report and outlook.

• Goldman added Gilead Sciences Inc (NASDAQ: GILD) to the America's Buy List based on its HIV franchise and pipeline. Goldman also upgraded Earthlink (ELNK) to Neutral from Sell on valuation.

• Baird upgraded Business Objects ADS (NASDAQ: BOBJ) to Outperform from Neutral following the company's solid Q4 report.

• Merrill Lynch upgraded British Airways ADS (NYSE: BAB) to Buy from Neutral.

• Digene Corp (NASDAQ: DIGE) was upgraded to Outperform from Market Perform at Piper Jaffray.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

As the January earnings crunch rolls into February, more industry giants, including Verizon Communications (NYSE: VZ) and Google Inc (NASDAQ: GOOG), are reporting.

Monday January 29

• Verizon to report Q4 earnings; conference call at 8:30am. Wall Street will be paying particularly close attention to Verizon's comments on its broadband operations, including the company's progress with its version of the triple play package [phone/Internet/television].
• Extended review period for Genta Inc's (NASDAQ: GNTA) Genasense. Cancer drug Genasense was previously deemed unapprovable by the FDA on December 15, 2006.

Tuesday January 30

• US Steel Corporation (NYSE: X) to report Q4 earnings; conference call at 2:00pm. Analysts will be focusing on overall refined and core steel prices and the company's international performance.

Wednesday January 31

• Boeing Company (NYSE: BA) to report Q4 earnings; conference call at 10:30am. Analysts will evaluate the company's aerospace performance and its ability to maintain momentum in government service work.
• Google to report Q4 earnings; conference call at 4:30pm. Google, since they never give any guidance, is always a mystery come earnings season. Anyone that wants to take a guess at what they will report should check out the quarterly Google Earnings Sweepstakes at the Internet Outsider blog.
• PDUFA date for GlaxoSmithKline plc's (NYSE: GSK) Arixtra for acute coronary syndromes.
• Broadcom Corporation (NADSAQ: BRCM) and SafeNet Inc (NASDAQ: SFNT) must file 10Q by 1/31 for continued NASDAQ listing.

Thursday February 1

• Amazon.com Inc (NASDAQ: AMZN) to report Q4 earnings; conference call at 5pm. Note that Prudential, which rates Amazon as an Underperform, saw the company's holiday season as tepid, which could bode ill for the company's quarterly report.
• PDUFA date for Merck & Co' Incs (NYSE: MRK) MK-0517, a new intravenous medication to prevent nausea and vomiting occuring after surgery.

Friday February 2

• British Airways ADS (NYSE: BAB) to report Q3 earnings; conference call at 9am. The company has been down recently due to a strike action by the cabin crew, and investors and analysts will be looking for clarity on the situation.

MOST NOTEWORTHY:

Arris (ARRS), American Eagle (AEOS) and Nokia (NOK) top today's lengthy list of downgrades.

• Arris was downgraded by Cowen to Neutral from Outperform. The firm cited 2007 expectations for muted revenue growth and lower than expected gross margins.
• Freedman Billings Ramsey downgraded American Eagle to Market Perform from Outperform based on valuation and the competitive environment.
• Merrill Lynch took Nokia off their Europe Focus 1 List today.

OTHER DOWNGRADES:

C.E. Unterberg downgraded M-Systems Flash (FLSH) to Market Perform from Buy citing expectations for the stock to trade inline with SanDisk (SNDK) after the acquisition was awarded regulatory approval.

British Airways (BAB) was downgraded by Societe General to Hold from Buy.

And finally, Bear Stearns downgraded Kohl's (KSS) and Avon Products (AVP) to Peer Perform from Outperform based on valuation.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).