BRITISH Airways yesterday plunged to its worst-ever loss of £45m in the first quarter, and said the cost of last week's wildcat swipe-card strike could be as high as £40m.

The airline also suffered during the three months to the end of June from the war in Iraq and the Sars virus.

Chief executive Rod Eddington said the £45m losses, which compare with a £65m profit for the same quarter last year, came during the most testing period in aviation history.

Britain's flag-carrier said revenues fell by 10.7 per cent in the three months to £1.8bn, while yields - which measure how much BA makes from each passenger - were down by 12.7 per cent.

The first quarter results followed an agreement reached between management and unions on Wednesday over plans to impose a new electronic system for clocking in and out at Heathrow Airport.

Hundreds of check-in staff had walked out in protest at the plans, causing chaos for travellers.

Mr Eddington said the disruption at Heathrow had been terrible for customers, terrible for BA staff and terrible for the business.

But he added that the strike would not prevent BA delivering its cost savings target of £650m by March next year.

The uncertainty caused by the strike has also hit forward bookings and will depress revenues for the second quarter.

BA's shares were unchanged yesterday, at 168p.