British Airways (BA) announced it made a loss before tax of £164 million between April and June this year.
While a number of airlines have succeeded in posting a profit for the financial year so far, BA is still mired in financial troubles.
The figure is £16 million worse than the same period in 2009.
But the airline said it was an improvement.
Willie Walsh, BA's CEO, said: "Despite both revenues and costs being hit by the closure of UK airspace following the Icelandic volcanic eruption and the impact of industrial action, our financial performance improved during the quarter from underlying revenues increases and further cost reductions."
The airline reduced total costs for the quarter by 3.3%, said Walsh, a trend he would like to see continue.
"Our focus must remain on cost control as we grow and continue our quest for permanent structural change across the business."
It is this quest, however, which is costing the business money - strike action looks likely to continue after the latest pay deal was rejected by cabin crew.
In its trading outlook, BA said its target is to break even at a profit before tax level for the full year "as we move forward on our strategic objectives".
According to Bob Atkinson, travel expert at travelsupermarket.com, BA is heading in the right direction, but there is more turbulence to come.
"The airline's handling of the ash crisis earlier this year was seen as a shining example by customers for its treatment of passengers.
"But it's the continuing industrial dispute with its cabin crew that's the real problem.
"Whilst demand always returns after disputes such as the one with Unite... it is the overall damage to the brand that the dispute is having in the eyes of the everyday passenger that has to be solved once and for all. Will this dispute ever end?"
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