British Airways yesterday reported an improvement in its underlying profits for the first quarter of the year despite hitting European turbulence from the strength of sterling. The company, which last weekend started selling off 2 million flights at massively reduced prices, said the strong British pound was giving European rivals an increased chance to compete on tariffs.

Pre-tax profits for the three months to June 30th were £145 million sterling, down on last year's £220 million. Turnover improved only 3 per cent - from £2.22 billion to £2.29 billion.