British Airways has reported a £401m pre-tax loss for the year to the end of March. This compares with a profit of more than £900m in the previous year.
Chief executive Willie Walsh blamed lower passenger and cargo demand and high fuel prices last summer for the loss. The airline's fuel bill for the year came to almost £3 billion, an increase of almost 45%, though BA said lower prices this year meant this would fall by £400m in the current year.
Mr Walsh said this was the harshest trading environment the airline had ever faced, and said he saw no immediate improvement. He said the airline would reduce its capacity next winter by parking up to 16 of its planes.
Mr Walsh said the airline was in talks with its unions on further pay and productivity changes in a bid to cut costs. The annual results included £78m for redundancy costs.
BA's revenue for the year to the end of March rose by 2.7% to just under £9 billion, but there was a 3.7% fall when currency movements were stripped out. Passenger revenue rose by just over 3% to £7.8 billion, while load factor - percentage of seats filled - fell 2.1 points to 77%.
BA said the economic downturn led to a significant fall in demand for premium travel in the second half of the financial year. The weak global economy also hit demand for air freight.
The airline said it would give no financial forecasts for the current financial year because of the difficulty in forecasting revenue.
