British Airways warned that airlines were entering a downward cycle due to global economic weakness and said rising fuel costs would stop it short of next year's target of 10 percent margins.
"To some degree, we've started the down-cycle, particularly in the U.S.," Finance Director Keith Williams told reporters. "We're well placed to deal with a down-cycle. We're going into the downturn from a position of real financial strength."
BA shares fell 7.6 percent to 245 pence by the close, continuing a five-week downward streak.
Europe's third largest airline said revenue was expected to rise by 4 to 4.5 percent to more than 9.1 billion pounds in the year to March 2009, but the operating margin would fall to around 7 percent.
The statement ahead of an investor day follows a warning last month that rising oil prices were becoming increasingly difficult to handle.
Williams noted that oil was currently trading at around $100 a barrel, compared to around $62 at the time of last year's investor day.