British Airways staff have shared a bonus of £35 million after the airline hit its target of achieving a 10% operating margin.

Chief executive Willie Walsh said the margin came as the airline announced a 45% increase in profits to £875 million and has also allowed it to pay out its first dividend to shareholders since 2001.

The margin was met thanks to a 3.1% increase in revenue to £8,753 million for the year ending March 31 and comes in spite of the airline paying off a fuel bill for the year which topped £2 billion.

Walsh said: “This is an outstanding financial result for the company despite rising fuel prices and significant economic slowdown in the last six months.  We have achieved our goal of a 10% operating margin which I am delighted has triggered the reward scheme for our staff.

“Delivering 10% has not been easy, but we have achieved it by remaining focused on our strategy for the last six years.  We tackled our pension deficit and we have strengthened the fundamentals of our balance sheet while at the same time growing a profitable business.

“We operate in a volatile market and this year has been no different. Against the background of a progressively tougher trading environment we have continued to work hard on our cost savings to deliver these strong results.

“Our profits are up some 45% and operating costs are down 0.7%. Excluding fuel, operating costs are down 3.0%. Fuel prices have hit record highs and continue to climb, driving some airlines into bankruptcy and putting pressure on others.”

Walsh added he would not be taking his own bonus following the fiasco of the Terminal 5 opening at Heathrow earlier this year although he added more than 2 million passengers have now used the terminal.