British Airways flew into more trouble this morning after investment bank Goldman Sachs downgraded the stock from a "buy" to a "sell" saying lower revenue and oil prices would cut profits by up to 46 per cent.

British Airways is already reeling from the chaos in the opening days of its £4.3 billion Terminal 5 headquarters, which prompted a public apology from the BA chief executive Willie Walsh.

The fiasco has resulted in 399 flights being cancelled up to and including Wednesday, with an estimated cost to the airline of £20 million so far.

Shares in the airline fell nearly 4 per cent to 230.75p in morning trading.

Goldman Sachs has reduced its three month price target for the stock from 330p to 200p and has transferred it from its Pan Europe Buy List to its Pan Europe Sell List.

Goldman Sachs said in research published today: "We are cutting our 2009 and 2010 earnings estimates by 43 per cent and 46 per cent respectively, mainly due to the increase in oil price."

The broker now bases its BA forecasts on an oil price of $100 per barrel and warned: "We believe the revenue environment is deteriorating both from a demand and a competition point of view.

"On revenue, its challenges are the UK consumer, the weakness in the financial services industry, the increase in competition on the North Atlantic, the weakness in the US — its most important long-haul market — and the operational challenges of Heathrow," the broker said.

BA is facing increased competition on its most lucrative routes after the “open skies” agreement, which allows any European carrier to fly to any American city, came into force yesterday.

In addition, the airline still faces the threat of its pilots going on strike despite threats of industrial action over Easter being averted.

BA is in dispute with the British Airline Pilots Association (BALPA) over its plans to use non-BA pilots for its new service between Europe and the US.

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