The world's biggest non-US airline, British Airways, posted a yearly profit Monday of £135 million, even though it lost £200 million in the first three months of this year. BA is the first major "premium" airline to post a profit in a long time...

That last quarter, though (January-March), really hit the airline hard. In the same period a year earlier, BA, then on the road to recovery, posted an £85 million loss; this year, with the Iraq war and SARS knocking international travel off its pins, that defecit ran to £200 million, perhaps presaging another turn to red ink, in this new fiscal year.

It's not all SARS and Iraq, though; and the news isn't all bad: the £84 million charge-off on the Concorde's retirement, at least, won't be repeated. And, even with that last-quarter loss, the £135 million operating (pre-tax) profit (nearly $220 million) looks a whole lot better than the year-before's £200 million loss.

BA chief Rod Eddington said the profit showed, "...good results in one of the toughest years in living memory;" and then noted on BBC radio that, "The last three months have been particularly difficult and the challenges... are very much with us today."

So far, the airline has cut 10,000 jobs of its planned. Eddington said the cutting, "...certainly makes it more difficult but sadly, it's just the world in which we live today... We have to accept that from time to time sadly this may happen..."

He clearly did not rule out a continuation of the downsizing; and, of course, it depends on the traveling public: "The timing of economic recovery is not clear. We must deliver further cost efficiencies in the coming year."

He would prefer that unexpected industry trauma, like war and disease, would't happen, as  "Anything that puts people off flying is bad for our business."

FMI: www.britishairways.com