BMI is planning to freeze pay and make another £45 million cuts after reporting a £100 million loss for 2008.

The airline’s £99.7 million post-tax loss compared with a £7 million profit the previous year.

It said the loss was the result of “unprecedented market conditions” combined with a £60 million increase in fuel costs, a £12 million increase in Heathrow charges and the impact of the chaotic opening of Terminal 5.

Last month, unions were gearing up to help BMI staff fight a pay freeze.

BMI issued a trading update warning that the first two months of 2008 continued to be “challenging” and capacity had been reduced in all areas except mid-haul, which had grown year-on-year.

However, it warned that even that growth was against a background of downtrading, and the outlook for the rest of the year was “uncertain”.

Negotiations with unions over a pay freeze were “constructive”, it said.

• BMI sparks union protest after pay freeze (9 Feb 2009)