British Airways shares went into freefall today after a shock profits warning and a collapse in the number of passengers prepared to pay hundreds and thousands of pounds for business and first- class tickets.

Shares in the national flag carrier plummeted to a five-year low, dropping by 14.8p to 163.3p and extending its losses over the last year to more than 60%.

In a statement on its September traffic figures, BA admitted that the number of passengers flying in its premium-paying cabins dived 8.6%. The number of passengers flying economy class fell 4.1 % in the month.

Worse was an unscheduled update on its finances, suggesting that the airline may crash into the red and that it could cut again its already downwardly revised revenue forecasts.

In its statement BA said: "The target continues to be for the business to break even at the operating level. Revenue forecasts for the year carry some risk."

BA had previously said in August that it expected to make a small profit this year and that its revenues were likely to see growth of 3%, down from the previous guidance of 3% to 3.5%.

The latest update reveals how far BA's fortunes have fallen since the end of its last financial year in March, when BA's chief executive Willie Walsh reported profits for the airline of £875 million as he achieved his long-stated aim of making a profit margin of 10%.