London, England (CNN -- British Airways on Friday announced a record annual pretax loss of $765 million, the biggest loss since the airline was privatized in 1987.
The losses are for the 12 months ending March 31, 2010, so they do not take into account losses incurred from the travel disruption caused by the volcanic ash cloud, or the latest threat of strike action by the union representing its cabin crews.
BA's pre-tax losses in the previous fiscal year were $577 million.
Chief Executive Willie Walsh said the company experienced a £1 billion ($1.44 billion) drop in revenue during the year, but managed to cut costs by the same amount.
"Our determined efforts on cost control mean that costs have reduced at a comparable level and our operating loss is virtually the same as in the previous year," Chief Executive Willie Walsh said in a written statement.
"To be in the midst of the biggest economic downturn in 60 years and produce the same operating figure as last year shows the hard work that has been put into steering our business through the recession."
CNN aviation and business correspondent Richard Quest said losses are hitting the entire airline industry because of the recession.
The situation is different for British Airways because of the ongoing problems it is having with the Unite union, but Walsh's cost-cutting plans may benefit the airline in the longer term, Quest reported.
"Absent the strike, by cutting its costs so dramatically, British Airways is well positioned for when the upturn arrives," he said.
Walsh criticized Unite, the union representing 95 percent of the airline's cabin crew members, for standing in the way of further cost reductions.
"Returning the business to profitability requires permanent change across the company, and it's disappointing that our cabin crew union fails to recognize that," Walsh said.
Unite and British Airways have been locked in an acrimonious dispute over the airline's plans to reduce pay and change working conditions, including reducing cabin crew staff on some flights in order to save money. The union says the changes will hurt customer service and damage the BA brand.
The union staged two strikes in March over the issues, and it plans a series of three more, starting Monday.
Asked Friday whether the airline's management plans to talk with the union over the weekend, Walsh told CNN there is a chance.
"There's always reason to be optimistic," he said.
He admitted some customers may be turning away from the airline because of the dispute with the union, but he said many other customers are standing behind BA.