The fall came on the top of Easyjet's bearish comments on the state of the industry and BA's loss of its mantle as Europe's biggest airline.

BA has been knocked into second place by the merger of Air France and KLM.

A pick-up in annual passengers did not impress as last year the Iraq war was taking place, depressing the industry.

The airline's traffic figures for April showed a 16% year-on-year rise in passenger numbers, but this had no impact on the stock.

Struggling industry

Analysts pointed out that the Sars crisis and the Iraq war were in full swing in the corresponding period last year, rendering the figures all but meaningless.

BA said that underlying market conditions were unchanged, with lucrative first and business class passenger volumes still above last year's levels, but economy volumes remaining sensitive to ticket prices.

Over the past two years the flag-carrier has embarked on a radical shake-up involving the loss of about 13,000 jobs.

Unprofitable short-haul routes have been cut and BA has adopted similar online ticketing tactics to those of its no-frills rivals, allowing it to cut more ground staff posts.

But with the price of crude oil hitting a 13-month high, the whole industry faces an uphill struggle.