British Airways has announced pre-tax losses of £401m, a far cry from the record profits of £922m the previous year.

BA chairman Martin Broughton blamed a “tough economic environment” and bleak trading conditions for the record loss.

Broughton envisaged recovery could take a long time but the reduction of fuel prices, which currently cost the airline £3b a year, would help with the long term recovery by saving them around £400m a year.

Chief executive for BA Willie Walsh condemned the governments plan to double Air passenger Duty (APD) in 2010, commenting the move would “undoubtedly disadvantage the UK’s competitive position within the airline industry.”

With more than 2,500 staff being made redundant since last summer, Walsh added that they were currently reviewing their pay and productivity structures with staff being offered unpaid leave or the option of temporary and permanent part time hours.

Walsh confirmed that the trading environment would remain tough and with no immediate change in sight, BA would have to commit to stay focused and promote themselves as a first-class global airline.

Walsh also refused to release 6 month or yearly financial predictions due to the difficulty in forecasting revenues.