British Airways could round off its “annus horribilus” mired in industrial action. Union insiders are warning that more than 12,000 cabin crew are likely to strike over the Christmas period in protest over job losses and changes to work practices.

A yes vote would pave the way for industrial action at any time from December 21, creating chaos for both the airline and passengers during one of the busiest weeks of the year.

The prospect of action grew after talks between BA and leaders of workers union Unite broke down last week.

Last year the airline carried 1.6 million people over the Christmas break. Any industrial action would mean the cancellation of flights, wrecking passengers’ travel plans.

Strike would also come as a bitter financial blow to cash-strapped BA. When flights are cancelled, it would normally offer a refund, travel on an alternative date or rebook customers on another carrier.

However the latter option would prove a mad chase for the few available seats at a peak holiday period.

Even if cabin crew stop short of an all-out strike, any industrial action will still cause considerable disruption to the airline’s operations.

It would leave planes and crew in the wrong place, triggering a wave of further cancellations and delays even on days when industrial is not taking place.

However Willie Walsh, BA’s chief executive, has said that the airline is facing a fight for survival at a time when the aviation industry as a whole has faced its worst crisis since September 11.

Last month, BA announced plans to cut a further 1,200 jobs in an attempt to cut costs.

It also wants to cut the number of cabin crew from 15 to 14 on all long-haul flights, and freeze pay for two years.

However, Unite condemned the move, saying: “The new contractual changes are an attempt to force staff to pay the price for management failings with the company wringing more and more out of fewer and fewer staff who will be paid less.”

It has also emerged today that the financial position of the loss-making airline had deteriorated further.

The trustees of its two pension schemes have told the company that the schemes now have a combined deficit of £3.7bn.

This is certain to lead to a big increase in the contributions BA must pay to the pension funds each year.