British Airways loses more bags and operates more delayed planes than any other big airline in Europe, a confidential report seen by The Times has found.

On the day that BA launched its first advertising campaign to rescue the reputation of Terminal 5 at Heathrow using the tag line “Terminal 5 is working”, it emerged that BA customers were 80 per cent more likely to lose their luggage than average in the first half of 2008.

Britain's third largest airline, bmi, also had one of the worst records for lost luggage this year, beaten only by BA in a table of 29 European airlines. Nine passengers travelling on a typical BA jumbo jet flight between January and June found that their bags were missing when they arrived at their destination. The research found that one third of BA's short-haul and medium-haul flights and roughly one third of its long-haul arrivals and departures were at least 15 minutes late this year, well below the European average. According to the Association of European Airlines (AEA), which carried out the study, Tarom Romanian Airlines was the most punctual airline.

Simon Evans, chief executive of the Air Transport Users' Council, the official passenger watchdog, said: “All we can do is express disappointment that Terminal 5 has not been the answer to all of BA's prayers. We are seeing some improvements but not that significant in terms of where BA is featuring in European airline league tables.” BA cannot lay the entire blame for its mislaid bags and delays on Terminal 5. Although the collapse of Terminal 5's state-of-the-art luggage system and delays in staff screening in March caused chaos and cost the airline millions of pounds, AEA figures for June show BA ranked 24th for lost luggage and 23rd for short and medium-haul on-time arrivals. The punctuality figures of bmi were only marginally better.

A spokesman for BA said: “These AEA figures reflect past problems at Heathrow, which have been well documented. Our advertising campaign represents the current reality at Terminal 5, which offers customers the best Heathrow experience they have had for many years. It is not surprising if other airlines are jealous.”

Despite BA's claims about the efficiency of Terminal 5, it is operating at only 50 per cent capacity and will not be fully tested until the autumn.

A spokesman for BAA, the airport operator, said: “Heathrow airport is completely full, there are no spare landing slots, which means the slightest disruption will cause problems in terms of punctuality. This underlines the need for a third runway. Until we get runway expansion, there will be problems.”

Last year BA lost 26.5 bags per 1,000 passengers, compared with 23 in 2006. In the first six months of 2008, 25.8 bags were mislaid per 1,000 travellers. Airlines typically offer about £25 for each day a bag is missing but there are no clear rules.

The AEA represents most of the larger airlines but not budget operators. Budget airlines tend to lose fewer bags than traditional carriers because they do not offer connecting services through hub airports.

Peter Morris, chief economist at Ascend, an aerospace industry consultancy, said: “These new figures are yet another indication that Heathrow is unsuited to the scale of operations carried out there. It's the basic problem of having far more traffic than it was ever designed for.” BA said yesterday that it carried fewer passengers last month. Just under three million went with BA in July 2008, a 3 per cent fall on the year before.

BA's first-quarter figures last week showed an 87 per cent dip in profits compared with 2007-08.

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