British Airways will this week post its largest ever interim loss as cabin crew prepare to vote on whether to go on strike at Christmas.

The expected £250m pre-tax deficit will underline the harsh trading conditions faced by the airline and stoke fears that full-year losses will be greater than last year’s record £401m shortfall.

Analysts forecast BA will report on Friday an operating deficit of about £127m for the first six months of the financial year — normally a buoyant period as it includes most of the peak summer season.

The pre-tax figure will be nearly double as it includes non-operating items such as currency fluctuations, fuel hedges and redundancy costs. At the halfway stage last year, BA made a pre-tax profit of £52m. In the previous financial year, 2007-8, it made an interim profit of £616m.

BA, led by chief executive Willie Walsh, remains on a collision course with 14,000 cabin crew. It wants to save £140m by cutting staff on flights, freezing pay and losing the equivalent of 1,300 personnel through voluntary redundancies and part-time working.

It also wants to introduce a contract for all new cabin crew hired with reduced pay, allowances and tougher working conditions.

Last week Unite, the union that represents BA cabin crew, said it would hold a strike ballot. Details of the vote are expected to be announced at a mass meeting at Sandown racecourse in Surrey. BA insiders say the timing of the ballot is likely to mean strikes at Christmas.

The airline intends to introduce the new working conditions for cabin crew from November 16. Unite plans to seek an injunction to stop the airline, a move that could trigger a court showdown between the two sides as soon as this week.

Meanwhile, another battle with staff looms over BA’s pension deficit. Actuaries have just completed a three-yearly valuation of BA’s two final-salary schemes, which has been submitted to the scheme trustees.

Insiders say the combined deficit could be as large as £3.9 billion, twice the company’s stock market value.

Trustees and the company will have to come up with a plan to address the deficit, with the possibility that BA staff will be asked to accept a reduction in benefits. The credit crisis and recession have hit BA hard.

The City boom drove the company to its best-ever results in the 2007-8 financial year, when it posted a £922m pre-tax profit. It also hit a 10% operating margin for the first time, and paid its first dividend in nearly a decade.

The dividend was hastily scrapped last year when business travel evaporated and the company slumped to a £401m loss.

Since that time the company has embarked on a series of cost-cutting and revenue-raising programmes, including asking staff to work for a month without pay and introducing charges for baggage and seat selection.

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