Strike costs BA pounds 17.5m a day

The strike by British Airways cabin crews is costing the airline approximately pounds 17.5m a day. This means the cost of the first three days of action has exceeded the pounds 42m that BA intended to save as part of the airline's Business Efficiency Programme - the belt-tightening procedure which provoked the dispute.

Analysts believe that the total cost to BA could be even higher. Aside from the loss of revenue from flight cancellations, further custom will be lost for several weeks on either side of the strike through fears of disprution. Last summer's threat of a pilot's strike cost BA pounds 15m even though no industrial action was taken and all flights left as scheduled. "The financial impact is beginning to become very grave," said Chris Avery, analyst at Paribas.

Although the potential loss of the loyalty of both customers and shareholders is "impossible to evaluate at this stage", he said the strike holds the further danger of being "damaging in the medium term to BA's reputation in the travel industry".

The BA share price recovered from losses earlier in the week to close at 693.5p. Market opinion suggests that if the strike goes on for more than a couple of weeks, BA may be forced to cut dividends. This would be the true test of the resilience of the company's stock.