UPDATE 4-Heathrow chaos seen hitting BA's revenues

(Adds Walsh comments paragraphs 5,6,10)

By Pete Harrison and Marc Jones

LONDON, March 31 (Reuters) - British Airways Plc (BAY.L) cancelled more flights during a fifth day of chaos at its new airport terminal and Citibank analysts forecast the disruption is likely to cost it up to 25 million pounds ($49.7 million).

BA shares fell more than 5 percent at one stage on Monday after the airline scrapped more than 50 flights from Heathrow and investment bank Goldman Sachs put a "sell" rating on the shares. The shares recouped some losses to close down 2.4 percent.

Nearly 250 flights have been cancelled since Thursday's troubled opening of the $8.6 billion showcase Terminal 5, with thousands of bags stranded due to baggage system problems.

Staff have struggled with parking, security and access to the terminal, which is the size of 50 soccer pitches and was heralded by BA as the best facility in the world.

BA Chief Executive Willie Walsh said he took responsibility for the problems but said he would not resign. He apologised to customers, saying the first day had been a "disaster" for BA but that performance at the new terminal was steadily improving.

"I remain very confident that T5 (Terminal 5) will deliver," Walsh told Sky News.

The high-profile opening has turned into a public relations disaster and analysts said BA's revenue will also be hit.

"Based on daily revenue of 23 million pounds and disruption costs of 100 to 200 pounds per passenger, we estimate the earnings impact so far to be 15 to 25 million," Citibank analysts said in a note.

Opposition Conservative transport spokeswoman Theresa Villiers called Heathrow a national embarrassment.

BACKLOG

Walsh said there was a backlog of 19,000 bags. Staff hoped to start dispatching 5,000 of the bags to customers on Tuesday.

Transport Minister Jim Fitzpatrick told parliament it would take up to a week to work through the stranded bags and called the disruption "extremely regrettable."

Fitzpatrick said BA and Heathrow operator BAA, owned by Spain's debt-laden Ferrovial, should work together to solve the problems and said affected passengers should be compensated.

Foreign Secretary David Miliband said he had met an unidentified foreign minister from another European country at the weekend who had lost his bags while in transit through Heathrow. "He asked me to pass on a message to BA/BAA: For goodness sake get your act together," Miliband said in his blog.

On April 30, BA plans to move long-haul flights, accounting for the other half of its Heathrow passengers, to T5.

Analyst Douglas McNeill at BlueOar Securities said the financial impact would be in the "low millions," but would cause the company to miss its long-term goal of 10 percent margins this year. He said the more serious damage would be to the airline's image.

Investors have become used to one-off dents to BA's revenue. Last year's results included 80 million pounds from a strike threat and 100 million pounds due to upheaval when police uncovered a plot to bomb transatlantic airliners.

Despite the revenue impact, BA's financial results may not be hit too hard, Citibank said. "Most losses are likely to be borne by staff because it reduces the likelihood of a bonus (based on a 10 percent operating margin target) being paid."

Rival airline Virgin Atlantic says it has seen around 300 first-class passengers switch across.

BA said it was too early to comment on the impact but plans to announce its March traffic statistics on Thursday, when it would normally comment on the strength of future bookings.

Goldman Sachs analysts changed their recommendation on BA shares to "sell" and cut their revenue forecasts, largely due to high fuel costs. (Additional reporting by Adrian Croft; Editing by Gary Hill)