British Airways could be poised to drop its business class on a number of short-haul services in its battle to stem record losses.

Chief executive Willie Walsh said that cuts in business travel expenditure have made it unsustainable to fly executives in slightly larger seats for one or two hour journeys.

BA has subsequently suffered a sharp drop in short-haul business-class passengers. These passengers have either downsized to economy or moved to low-cost carriers. One in five easyJet passengers is now a business travel.

Walsh told The Times: “Short-haul premium will never recover. That part of the business has changed for ever and we have to address it.”

BA is understood to be reviewing its short-haul operations and the premium seats could be removed from planes operating out of Gatwick and regional airports.

However, it is likely to retain premium in short-haul flights operating from Heathrow to capture business-class transfer traffic.

The cut back comes despite BA revealing better-than-expected results for its third quarter.

Analysts had been forecasting operating losses of up to £150 million, but the airline reported a £25 million operating profit due to the effects of cost-cutting and cheaper fuel.

However the airline is on track to rack up full-year losses of £580 million. This would still be a record and comes after it lost £401 million last year.

Mr Walsh explained that the better-than-expected performance in the third quarter showed that BA’s cost-cutting strategy was working and more efficiency gains were required to stem the losses.