The ability of British Airways to plough from one crisis into another is becoming legend. Willie Walsh, the chief executive, joked recently that the company had become “the world’s favourite headline”, mocking the “world’s favourite airline” slogan.

But Mr Walsh’s comment was more cringeworthy than funny. Despite the success of easyJet and the ambitions of bmi, it is still BA that most visibly represents the UK overseas. It is, after all, BA that carries the Union Jack on its tail section.

In the past BA traded on its image as Britain’s airline, persuading even the acerbic American writer P. J. O’Rourke to extol the virtues of drinking a nice cup of tea while travelling with the British.

These days, however, BA seems more intent on competing with Ryanair for the title of crassest airline in the skies. For example, having alienated tens of thousands of passengers last week with threats of industrial action, BA followed up this week by introducing penalties of £120 for checking more than one suitcase.

Apart from encouraging passengers to carry even more hand luggage, these new checked-baggage rules make even Ryanair’s mean-spirited revenue-raising ideas seem fair.

Then there was the incident last year when a BA employee was suspended for wearing a cross. Perhaps it is arrogance or simply poor management, but these issues should never be allowed to explode into national debates.

As the past 12 months have demonstrated, BA has plenty of serious problems to face without inflicting wounds on itself. Last August the airline was forced to cancel 1,280 flights after the discovery of an alleged terrorist plot at Heathrow. This led to months of chaos as the authorities clamped down on hand-luggage allowances.

A month later it was revealed that BA’s pension fund deficit had blown out to £2.1 billion from £928 million in three years. Thenthe airline cancelled 600 flights in December as fog shrouded Heathrow.

BA is also hindered by a workforce that occasionally forgets that it no longer works for a public-sector employer. Having got BA to bend over backwards to resolve the pension issue, some of the company’s trade unions decided to exploit the situation and demand changes to working practices. They took the airline to the brink of industrial action over issues such as the imposition of a maximum number of sick days.

These problems matter for BA because consumers withhold bookings when they lose trust. Disruptions eat into profits for weeks after the event.

And yet, despite all this, BA has seen its share price rise by 68 per cent, to 567½p, since the start of last year. The company’s share price is beginning to look Teflon-coated, which, perhaps, has lulled its executives into thinking that they can get away with charging £120 for “extra” baggage.

The share price rise comes as BA benefits from a boom in air travel in which even the crippled American carriers have returned to profitability. BA has also been supported by constant speculation that it will be bought.

This was given fresh impetus at the end of last year, when a private equity consortium bought Qantas, the Australian airline.

The prospects for this year seem equally bright, with the airline market continuing to grow.

According to HSBC, the worst-case scenario for growth in passenger demand between 2006 and 2009 will be 5.1 per cent and potentially as high as 6.4 per cent — twice the level of overall economic growth in the UK.

BA has positioned itself well to take advantage of this growth with new business-class cabins that will attract premium passengers in large numbers. Even fuel costs, which rose £350 million to £1.95 billion last year, are under control this year through a comprehensive hedging policy.

Now that BA has all but resolved its pension deficit, it can start to consider expanding its fleet of aircraft. This month the airline will announce a roughly $2 billion (£1 billion) interim order, almost certainly for Boeing 777s, to boost its capacity over the next three to four years.It will unveil plans this year to replace its existing fleet, which will enable the airline to improve its fuel efficiency and cut carbon emissions.

The importance of this new fleet should not be underestimated, because it will demonstrate BA’s determination to remain a global leader in intercontinental travel. However, these favourable trading conditions may not translate into another 67 per cent increase in share price in the coming 12 months.

There are two reasons for this. First, the market is beginning to realise that a bid for BA is unlikely to happen. Deutsche Bank recently pointed out that private equity buyers would struggle to win approval from BA’s staff for a takeover.

Private buyers would also be put off by the asset value of BA’s existing fleet, which the bank believes is worth £5.6 billion against BA’s balance sheet value of £7.4 billion.

Deutsche said: “In simple terms, the buyer of BA is being forced first to pay up for an overvalued fleet and then replace it.”

A Middle Eastern buyer, which was mooted as a possibility last year, could still find BA appealing, but there are political factors that would make such a deal unlikely.

The second factor that could stall BA’s share price this year is the company’s unerring ability to court controversy. What price a ban on Muslim headscarves?

Times Recommends

• UK savers left in lurch as Icesave crumbles
• RBS shares close under £1 on bailout fears
• Asian stocks rebound on Australian rate cut