UK flag carrier British Airways announced Monday its largest annual pre-tax loss since it was privatized by the Thatcher government back in the early eighties – £200 million ($291.4m; €319.5m) against a profit of £150m in 2000.

Cost-reduction has, however, brought the airline significant benefits in its fourth quarter although demand remains fragile. Chief executive Rod Eddington claims he is confident that further gains can be made via performance improvements, yet more cost reductions, and greater flexibility in varying aircraft seating capacity.

Warned Eddington: “It's going to be a long, slow haul. We're not being overly ambitious on the revenue [projections].” Instead, BA will concentrate on cutting costs further, the next twenty-four months being “critical in getting costs out”. But deciding how far to cut back without jeopardizing future operational stability “is always a challenge”.

Unpalatable though the results are, and despite the absence of any dividend to stockholders, the numbers bettered analysts’ predictions and BA shares rose Monday to £2.38 on the London Stock Exchange.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff