Scotland's tourist authority warned of a possible drop in visitor numbers yesterday after British Airways announced plans to cut flights to Scotland and ratchet up the prices of those that survive the cull.

Small businesses also warned flights could become scarce and prohibitively expensive, preventing owners from travelling and putting off British tourists, who account for 80% of visitors to Scotland.

BA blamed the cuts on "the worst trading environment the industry has ever faced", caused by the double whammy of a global economic slowdown and exorbitant oil prices. Fuel now accounts for one-third of BA's overall costs and its fuel bill is expected to soar to £3 billion a year.

The announcement came after the airline revealed a massive dip in its profits. BA's pretax profit between March and June this year was £37 million - an 88% drop from the £298m it earned over the same period a year ago.

Willie Walsh, the chief executive of BA, said: "We are in the worst trading environment the industry has ever faced.

"The combination of unprecedented oil prices, economic slowdown and weaker consumer confidence has led to substantially lower first-quarter profits."

Almost 500 of the 5000 flights between Scotland and Heathrow and Gatwick will be axed between October and March as part of BA's plans to cut 3% of its flights.

Aberdeen is worst off, with 6.5% of flights to the city to be discontinued. Glasgow will lose 6% of its flights and Edinburgh 3%.

BA's operations in Scotland will be pared back to just the London routes from October when it ends its arrangements with Loganair for 23 services in the Highlands and Islands. Flybe will take over those routes.

VisitScotland is already making plans to persuade visitors that the romance of travelling by train is preferable to the convenience of flights.

James Lakie, from the national tourist agency, said: "There could be an impact on the tourism industry, but there are a number of ways people can travel to Scotland.

"If the flights are cut that's a disappointment to us because the main way people get here is flying into Edinburgh and Glasgow."

"We hope people in London will use other routes like the train. We are running a Highland Spring campaign on the tube in London to showcase a perfect day that people can have coming up to Scotland.

"Getting the train holds a romance to it, and Scotland is a romantic place. If people aren't able to get flights this may be our opportunity to highlight getting the train instead."

The Federation of Small Businesses warned that BA's plans, when considered alongside Scotland's "poor transport links with the rest of the UK", will put the country at a "competitive disadvantage".

A spokesman said: "The way that British Airways have cancelled their flights makes it very difficult for small businesses to organise journeys.

"There are also implications for the tourist industry because 80% of tourists come from the UK.

"For some people, there's no other quick way to get to London, people in the northwest for instance. This decision is unfortunate at best."

There are no plans yet to put on any extra rail services to make up for the lost flights, First ScotRail said, but it insisted it would keep an open mind.

A spokesman for the rail franchisee said: "We have not made any decisions yet, but we do acknowledge that this is an opportunity for us to increase awareness of the Caledonian Sleeper.

"Until we see the outcome of the drop in flights, there won't be any decisions made."