British Airways today showed its aggressive drive to cut costs was paying off, as it reported pre-tax profits of £65m for the last quarter.

The figure for the three months to June 30 is 62.5 per cent higher than the £40m recorded in the same period in 2001.

And it comes just two months after BA reported its worst set of results since privatisation 15 years ago, with full-year losses of £200m.

The group has been hit by the slump in demand for air travel following September 11 and has also faced intense competition from budget airlines such as Ryanair and easyJet.

In response it has slashed costs, including cutting thousands of jobs.

The cost reductions meant it managed to improve profits despite a 10.7 per cent slide in revenues during the quarter, to £2.05bn.