The airline made a pre-tax loss of £164m in the three months to 30 June, down on the £148m loss made in the same period last year.
BA put the costs of grounded flights following the Icelandic eruption and the long-running dispute with the Unite union at £250m.
Revenue also declined 2.3% to £1.93bn.
Despite announcing the carrier’s eighth consecutive quarterly loss, chief executive Willie Walsh says the company’s fortunes are on the up.
“While some economic experts are flagging the risk of a “double dip” recession, the steady recovery continues and, on that basis, we continue to target to break even at a profit before tax level for the full year,” he says.
The company reported yields – the revenue made on each passenger for every mile travelled – rose 12.7%, helped by an upturn in business travel.
BA is hoping its merger with Spain’s Iberia, unconditionally cleared by the European Commission earlier this month, will help boost revenue.