Ian TaylorBritish Airways’ loss of £531 million in the year to March was a record, but it was also 12% better than analysts forecast and certainly not as dire as it might have been, given a loss of £1 billion in annual revenue.

The good news is BA almost matched that loss of revenue in cost savings – slashing £597 million off its fuel bill and saving another £390 million elsewhere.

Those cuts include the loss of 3,800 staff in the past year, and more than 6,000 since September 2008, through voluntary redundancy, part-time working and natural attrition.

The airline also reported a much lower operating loss (£231 million), including £85 million in one-off restructuring costs. So the underlying figures appear much better.

The bad news is these figures do not include the impact of the ash crisis or the cost of resumed strikes by cabin crew – a joint bill that one analyst estimates at up to £300 million for the financial year just started. So the cost cutting will not stop.

To put BA’s loss in context, Air France-KLM reported annual losses of €1.56 billion (£1.36 billion) for the same period, while Lufthansa’s operating losses for the first quarter of 2010 ballooned from euro44 million to €330 million (£287 million). So BA is doing no worse than its major rivals.

In addition, while the £531 million loss for 2009-10 followed a £401 million loss in 2008-09, BA made a record £883 million profit in 2007-08 and a further £611 million in 2006-07. So the carrier is not at death’s door.

Chief executive Willie Walsh has every right to point out: “To be in the midst of the biggest economic downturn in 60 years and produce the same operating figure as last year shows the hard work that has been put into steering our business through the recession.”

A key to recovery will be premium traffic and that does appear to be returning. Walsh now needs a settlement with cabin crew union Unite. However, it appears he sees a change in leadership of Unite’s cabin crew branch as vital to “the permanent structural change” he says is needed to cut costs.

So unhappily, the dispute may drag on until either it is clear Walsh is the outright winner or BA fails to maintain 70% of services during a strike.