Cost cuts which will cost 13,000 staff their jobs have been credited by British Airways for a profits revival.

The airline, revealing a leap in profits to �245m for the three months to the end of September, warned of "continued uncertainty" in the aviation market.

But it said that, thanks to a cuts plan which had seen fuel and sales costs slashed, and cost 8,180 jobs axed so far, it should be able to continue the momentum to show a full-year profit.

"The results show we are delivering despite the difficult trading environment," chief executive Rod Eddington said.

The carrier was among the worst hit by the aviation downturn following the September 11 attacks the US, and last year notched up its worst results since it was privatised 15 years ago.

Budget carriers challenged

The latest profit, which compared with earnings of �5m a year before, came despite a decline of 6.8% in passenger takings.

Passenger numbers during the first 10 months of the year were 5.2% lower than in the same period last year.

But the BA cuts package, called "future size and shape", has seen airline capacity by 10%.

"Unprofitable capacity was reduced and efficiency actions continued in all areas," Tuesday's statement said.

Future size and shape has also seen BA axe services, move routes from London's Gatwick airport to Heathrow, and cut fuel costs by almost one third.

BA has also increased its range of low fares, allowing it to tap into the budget market which has remained lucrative despite the aviation downturn.

Budget carrier Ryanair on Monday announced record profits.

Mr Eddington said: "The strategy to compete against the no-frills carriers is working."

BA chairman Lord Marshall added: "The implementation of the future size and shape programme... is delivering the savings that, in the absence of war or terrorist action, are expected to return out business to profitability for the full year."

City reaction

Analysts gave the results a mixed response.

"They have done very well on the cost side," said Commerzbank analyst Chris Tarry.

"It's a result that is ahead of expectations," Morgan Stanley analyst Martin Borghetto said.

"[But] there are still pressures visible in the result."

British Airways shares closed 13.25p, or 8.3%, lower at 146p.

Analysts noted that the stock had already risen strongly since hitting 83p last month, earning BA ejection from the FTSE 100 index of leading listed UK firms.