Cash call at embattled BA seen only as last resort

* Analysts do not expect equity raising in short term

* Union talks, pensions, market outlook on AGM agenda

By John Bowker

LONDON, July 13 (Reuters) - British Airways (BAY.L) has not ruled out a major rights issue to help shore up its balance sheet but analysts see such a move as an absolute last resort and one that could destroy management credibility.

The carrier, which hosts worried shareholders at its annual general meeting (AGM) in London on Tuesday, declined to comment on a weekend news report that it has received a blessing from major investors for a 500-million-pound ($805 million) fund-raising in the event of a drawn out crisis.

Analysts polled by Reuters said the move was not impossible but added it would be a last throw of the dice for the troubled airline -- which posted record losses for the year to end-March and has seen crucial business passenger numbers plummet amid extremely tough trading conditions.

"Although (a rights issue) cannot be dismissed, it will be avoided if at all possible ... It's a very expensive way to raise capital and you would only do it if you absolutely had to do it," said Nick Cunningham, an analyst at Evolution Securities.

He said the tone from management presentations had been that a rights issue was not on the agenda, and that a U-turn would therefore leave the airline with a "credibility problem".