British Airways has reported a sharp fall in profits after the airline was hit by rising fuel costs and the the impact of the economic crisis.

Pre-tax profits of £52 million were down from £616 million a year earlier after fuel costs increased by £511 million to £1.49 billion.

BA said it hoped to make a "small profit" for the 2008/09 year, but warned that fuel costs for the full year were still expected to be about £3 billion.

While oil prices have fallen sharply in recent weeks, BA said this benefit was being offset by exchange rate movements and previous hedging contracts.

Revenues for the six months to September 30 were up 6.4 per cent, despite a weakening in long-haul premium traffic since the summer.

Chief executive Willie Walsh said: "The six month period will be remembered as one of the bleakest on record. The period was hit by a crisis in the banking sector, record fuel prices and several airlines going out of business."

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