British Airways' budget airline, Go, yesterday reported losses of £20 million sterling (€30 million) for its first 17 months. Chief executive Ms Barbara Cassani was pleased with the maiden figures and said the business would break even by the end of its third year.

"By offering a top quality product at the lowest possible price, we have established Go as a leading brand and attracted the new breed of intelligent traveller who wants a simplified airline service," she said.

Pre-tax losses for the 17 months to March came in at £19.9 million on turnover of £31.6 million.

The company has been the subject of attacks by rival discount airline EasyJet, which has offered 50 free flights in a competition for people to guess Go's losses and is also one of Ryanair's competitors.

EasyJet accused BA last year of attempting to crush opposition by offering one-way tickets on London to Edinburgh flights at £15.

Go, started in May 1998, said it had so far used only half of the £25 million launch investment from BA during the 17 months and had strengthened its resources with a strong summer performance.

Ms Cassani said: "We are now carrying 200,000 passengers a month and are well-positioned as a leading player in the low cost market."