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Last Updated: Friday, 5 August 2005, 08:10 GMT 09:10 UK
Fuel surcharge lifts BA revenues
British Airways craft on tarmac
BA has imposed two fuel surcharge rises this year
British Airways (BA) saw earnings rise 36% in the first quarter as first and business class passenger numbers rose.

The airline said operating profit for the three months to July was 176m ($313.1m), compared to 129m last year.

BA added it thought full year earnings would be higher than forecast, due to favourable exchange rates and increased fuel surcharges boosting revenues.

Europe's second largest airline said it now expected total revenue for the year to March 2006 to grow by 5.5% to 6.5%.

'Improved outlook'

In June, BA increased its fuel surcharge on airline tickets for the second time this year.

The yield and revenue situation is improving at a faster rate than the fuel cost increase
Nick van den Brul, BNP Paribas

It hiked up the surcharge on each long-haul return ticket to 48 ($87) from 32, and increased it to 16 from 10 on short haul flights.

"The continuing strength of the US dollar and increased surcharges have improved the revenue outlook," said chairman Martin Broughton in a statement.

The airline reported strong passenger figures for July, overcoming any possible fear-factor connected to the bombing attacks in London during the month.

Like many airlines BA has had to pass on the cost of increasing world oil prices to its passengers, in the form of surcharges.

And, despite a 37.6% increase in the price of fuel during the three months the airline said it had made savings in other parts of the business.

"They are pretty good numbers, that is clear," said BNP Paribas analyst Nick van den Brul.

"As we saw with Ryanair, the leading players in Europe, the yield and revenue situation is improving at a faster rate than the fuel cost increase," he added.




BBC NEWS: VIDEO AND AUDIO
See why BA believes it has increased profits



SEE ALSO:
BA profits boosted by new rules
04 Jul 05 |  Business
BA ups fuel surcharge on tickets
24 Jun 05 |  Business
BA sees jump in full-year profits
13 May 05 |  Business
BA expects big jump in fuel costs
10 Mar 05 |  Business


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