London, England, United Kingdom (AHN) - Embattled British Airways reported a $246 million (164 million pounds) first quarter loss Friday due to the series of strikes that hit the air carrier and the Icelandic volcano eruption.

Despite the Q1 loss, the air carrier said its recovery remains on track and even expects to break even for 2010. This information led BA shares to go up by almost 3 percent in early trading. The April to June loss this year was larger than the $222 million (148 million pounds) lost by BA for the same quarter in 2009.

BA Chief Executive Willie Walsh said in a statement, "Despite both revenues and cost 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 revenue increases and further cost reductions."

BA issued its Q1 report while it is still negotiating with transport union Unite, which represents the air carrier's cabin crew whose industrial action caused a large chunk of the income loss. At the heart of the labor dispute is the removal by BA of travel perks to flight attendants who joined the 22 days of strike spread in March, May and July.

Unite officials have indicated pessimism that the ongoing negotiations brokered by conciliation service Acas would result in a resolution to the conflict between the union and the air carrier. Walsh said that despite BA's labor problems with its cabin crew the company will continue to pursue changes in British Airways, as introducing permanent structural change is his top priority.