Struggling British Airways says 800 of its staff have agreed to unpaid work, while thousands more have accepted pay cuts, helping the group save up to £10m.

After diving into a financial loss, the airline last month asked staff to work for free for a month, while promising that chief executive Willie Walsh and BA's finance director Keith Williams would forgo their July salaries. 'This is a fantastic first response,' Mr Walsh said in a statement.

The world's leading commercial airlines are facing a cash squeeze as the global economic slump crushes demand for plane tickets. BA last month reported an annual loss of £375m, also blamed on high fuel costs. The airline has cut 2,500 jobs worldwide over the past year.

BA said in a statement: 'Nearly 7,000 British Airways staff have taken an early opportunity to apply for voluntary pay cuts in support of the airline's cost reduction programme.'

Staff who have offered to work unpaid will still receive shift allowances and other payments, although they will forego their basic pay.

But Mick Rix, representing the GMB union, hit out at BA for releasing data on pay cuts while negotiations were continuing. 'We are locked into hard negotiations on making significant financial savings but BA seems only interested in making headlines rather than reaching an acceptable deal,' he said.

Last week, union leaders urged British Airways pilots to accept shares in the company in return for a pay cut.