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Last Updated: Friday, 24 June, 2005, 08:05 GMT 09:05 UK
BA ups fuel surcharge on tickets
BA blamed high fuel costs for a 40% drop in quarterly profits
BA's price rise follows record oil prices of $60 a barrel
British Airways (BA) said rising oil prices have forced it to increase the fuel surcharge on airline tickets for the second time this year.

From 27 June, BA will increase the fuel surcharge on each long-haul return ticket to 48 ($87) from 32.

The short haul surcharge will go up to 16 from 10.

"The continuing rise in global oil prices to almost US$60 a barrel means a further surcharge increase is regrettably unavoidable," BA said.

Keeping afloat

"We now expect our fuel bill for this financial year to be around 1.6bn," said BA commercial director Martin George.

No carrier can absorb these higher oil prices so, unfortunately, passengers - and that includes passengers with all airlines - will have to pay more
Kieran Daly, airline analyst

That is 450m more than last year's fuel bill, and 150m more than BA predicted in March, when it last increased the fuel surcharge on airline tickets.

Before then, the surcharge was 10 on long haul tickets and 6 on short haul ones.

The additional fuel surcharge only applies to tickets issued from Monday 27 June.

Overall, BA is in its best financial health for several years and the company is anxious to make sure rising fuel costs do not undermine this.

Earlier this year, it reported an 80% jump in annual profits as sweeping cost cuts offset record jet fuel prices.

In the fiscal year ending 31 March, the airline posted a profit of 415m on sales of 7.8bn.

A large part of the savings came from job cuts as the airline reduced its headcount by 13,000.

Industry-wide problem

Kieran Daly, editor of airline news service Air Transport Intelligence, said no carrier was immune to increases in aviation fuel prices.

"No carrier can absorb these higher oil prices so, unfortunately, passengers - and that includes passengers with all airlines - will have to pay more," he said.

"Some airlines are not imposing surcharges, but nevertheless an increase will simply feed through in one way or another.

"It's virtually impossible to work out the mathematics of the whole thing. The whole price thing is not as transparent as it seems."

Budget airlines Easyjet and Ryanair both reiterated they would not be introducing fuel surcharges following BA's annoucement.

BA's shares were down more than 2% in early trading on the London Stock Exchange.

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