British Airways has been able to shock the market by posting its first operating profit in more than a year. However, despite this first bit of positive news for the airline, British Airways still expects to rack up its heaviest annual losses since 1987.

This flag carrier reported a £25 million operating profit in the third quarter. This profit came against analyst predictions of a loss of £90-£100 million. Despite the big freeze and the threat of a strike, British Airways has somehow found out how to put up some positive numbers.

British Airways chief executive Willie Walsh said the results highlight the impact of permanent cost reductions across the airline. He said that these changes, combined with capacity reductions and external spending cuts, means operating costs are down by 10.5 percent.

Pretax losses shrunk from £122 million last year to £50 million. This came despite the fact that revenues fell by 12.9 percent due to capacity cuts. The airline said it had cut operating costs by nearly 11 percent. This has been helped by lower jet fuel prices and continued savings from its restructuring program.

The airline still does remain on track to make a record full year loss for the 12 months to March 31. Over the first nine months of its financial year, pretax losses were £342 million compared to £70 million last year.

Walsh finished up by adding that while they are on the right track, they still expect to make record losses this year. Permanent structural changes are being introduced in all areas and will return them to sustained profitability.