BRITISH Airways, which runs flights from Newcastle International Airport to London, said it would cut more jobs as it saw its profits nosedive.

The airline yesterday announced record annual losses of £401m after suffering a near-£3bn fuel bill in last year’s oil price bubble. The carrier’s nosedive into the red comes after record profits of £922m the year before.

BA confirmed it was now offering staff unpaid leave and the option to go part-time, having already frozen pay and axed more than 2,500 posts since last summer to cut costs.

The company yesterday warned there would be further job losses, but declined to say how many of its 40,000 workforce would be affected.

Management will also forgo bonuses and the group is not offering any dividend payout to shareholders under a drive to offset BA’s trading troubles.

BA chief executive Willie Walsh and finance director Keith Williams said they will work for no pay in July as part of the cost-cutting programme.

Mr Walsh is paid £735,000 a year and Mr Williams gets £440,000.

Yesterday’s results mark the worst seen since BA’s privatisation in 1987.

BA said it had suffered in the “harshest trading environment we have ever faced”, with revenues in the fourth quarter down 8.4 per cent and pre-tax losses of £331m.

The global economic woes have badly hit the premium travel market, down 13 per cent in the past six months of the year for BA, and the group has had to offer cut-price discounts to keep non-premium travel broadly flat over the year. BA recently launched its first two-for-one offer to help fill planes.

Martin Broughton, chairman of BA, said: “In the last 12 months we have gone from a record profit to a record loss due to the current tough economic environment.”