International Airlines Group (IAG) gave the warning after posting widening first-quarter losses to £211.6million from £38million on revenues up 7.8 per cent to £3.1billion.
British Airways posted a £62million loss with Spanish partner Iberia losing £136.6million, up 70 per cent on last time.
Chief executive Willie Walsh said the main drag had been a 24.9 per cent hike in fuel which is likely to cost £1billion more for the full year.
Chinese travellers also have trouble getting visas
He also blamed pilot disruption at Iberia, where they took strike action over company restructuring, and weak travel demand given the country’s economic woes.
However, Walsh said he had no regrets about the merger with Iberia declaring it a good long-term move as was buying BMI despite a £193million integration hit expected to leave profits for this year at around break-even.
IAG shares rose 21⁄2p to close at 1651⁄2p Walsh also took a swipe at the British Government for undermining IAG by increases in the Air Passenger duty tax and for not improving airport border controls.
He said: “London is doing well with premium long-haul travel in demand especially to north America but we are a country that is difficult to get into with our high taxes.
“Chinese travellers also have trouble getting visas. The Government has to wake up if we are going to grow in the global economy.”
BAA, whose airports include Heathrow, said it handled 1.9 per cent more passengers in March and April this year than the same period in 2011.