British Airways has announced the biggest loss since the company was privatised in 1987, BBC reported.
BA reported a loss before tax of £401m for the year to 31 March, after seeing its results hit by a weak pound and higher fuel costs.
BA made a revised profit of £922m in the previous year.
Although revenues increased to almost £9bn, BA faced a near-£3bn fuel bill. Chief executive Willie Walsh said he saw "no signs of recovery anywhere".
Fuel costs rose 44.5% after the price of oil soared last year. The weaker pound also contributed to rising costs as fuel is bought in US dollars.
The results included redundancy-related costs of £78m.
BA said it had cut more than 2,500 jobs since last summer and added that it was in talks with unions about "pay and productivity changes".
"The prolonged nature of the global downturn makes this the harshest trading environment we have ever faced and, with no immediate improvement visible, market conditions remain challenging," Mr Walsh said.
Despite BA's claims that it has been a victim of a downturn in global conditions, analysts say the airline is not entirely blameless for its poor results.
"The first half of the year really was [a period of] self-inflicted wounds from the Terminal 5 opening problems," said airline consultant John Strickland.
He added that BA had been particularly hit by a fall in premium traffic - business class and first class passengers.
"They rely a lot for their profitability on first and business class passengers," he said.
The BBC's business editor Robert Peston said that BA's loss was a result of "a lamentable rise in costs", including engineering and aircraft costs, landing fees and staff costs.
The loss was worse than BA had forecast. Shares in the airline were down 7% to 151.6 pence in morning trading.
The airline made an operating loss of £220m. In January it said it expected to make an operating loss of £150m.
However, BA said that it had seen a "significantly better" operational performance, and that it had received record customer satisfaction ratings.
The total number of passengers carried fell 4.3% to 33.1m.
The results also included the impact of the airline's first full year of operations at Heathrow Terminal 5, and BA said more than 24 million passengers had flown through Terminal 5.
Global demand for premium travel fell significantly with BA's premium traffic down 13%.
BA added that it had had to take "significant pricing actions" to stimulate non-premium sales, which were broadly unchanged on the previous year.
"Fares have been going down and will continue to be very competitive," Mr Walsh told the BBC.
"I don't expect to see any increase in fares in the coming year," he added.
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