British Airways has posted an operating loss of £220 million ($349 million) for the year ending 31 March, against a previous profit of £878 million.
The loss includes a restructuring cost of £78 million.
BA's revenues for the period were up by 2.6% to just under £9 billion for the year, but fuel costs neared £3 billion while passenger and cargo demand dropped.
The carrier has turned in a pre-tax loss of £401 million compared with a £922 million profit in the previous year.
"The prolonged nature of the global downturn makes this the harshest trading environment we have ever faced and, with no immediate improvement visible, market conditions remain challenging," says BA chief Willie Walsh.
Traffic volume and yield have not improved over the last quarter of last year, says the airline, and BA is not issuing new financial guidance for the current six-month or 12-month period because of the "difficulty in forecasting revenues".
BA chairman Martin Broughton says: "In the last 12 months we have gone from a record profit to a record loss due to the current tough economic environment.
"That only serves to underline the extremely difficult trading conditions that we are facing, despite our best ever operational performance, and any recovery is likely to take longer than initially envisaged."
He says the revenue outlook "continues to be weak" but BA expects to reduce its fuel costs by about £400 million.
BA also intends further cost reductions from capacity and other efficiency measures to mitigate the deterioration in revenues.
- Related blog - Airline Business: Walsh sees no sign of recovery
Source: Air Transport Intelligence news
