BA's Terminal 5 losses top £16m

BA says Terminal 5's performance is slowly improving

British Airways has said that the chaos surrounding the opening of Terminal 5 has so far cost about £16m.

The costs were incurred mainly by the cancellation of 300 short-haul flights, the firm said.

"Although there remains a small number of cancellations for today and tomorrow, the Terminal 5 performance is steadily improving," BA said.

Earlier the airline had promised that a full schedule of flights would operate on Saturday.

It will be the first day of normal operation for the terminal, which has been hit by serious problems with baggage handling.

Earlier this week, analysts at Deutsche Bank forecast the problems at Terminal 5 would persist into the summer and cost the airline about £150m in total.

On 30 April, BA plans to move long-haul flights to the new terminal.

Long-term damage?

There is concern about how the chaos at Terminal 5 will damage BA's reputation.

Passengers are likely to get greater choice in the future, particularly on transatlantic routes, following an agreement between the US and the European Union to open up travel.

Those routes have been crucial in maintaining BA's profitability.

As it outlined the cost of the Terminal 5 disruption, BA also announced that its passenger traffic was down 2.8% in March from the same month last year.

The load factor - which denotes the number of seats sold as a proportion of total seats - fell to 75.4% from 76.3% in March 2007.