LONDON (Reuters) – British Airways is raising its fuel surcharge on long-haul tickets for the fifth time in a year following a surge in oil prices to record highs.<\/P><\/p>\n
Europe’s third-biggest airline said on Thursday the levy on long-haul tickets sold domestically would rise to 30 pounds per flight on Monday, up from 24 pounds previously.<\/P><\/p>\n
BA introduced a 2.50 pound fuel levy in May 2004 and first raised it last August to help offset surging oil prices, which touched record highs above $70 pounds per barrel last week.<\/P><\/p>\n
Other major European airlines are also reviewing their fuel surcharges.<\/P><\/p>\n
“Our fuel costs remain a real burden. The price of oil hit a record high of just over $70 a barrel in the aftermath of Hurricane Katrina,” BA’s commercial director, Martin George, said in a statement.<\/P><\/p>\n
Fuel is the airline’s second-biggest cost after labour.<\/P><\/p>\n
The company’s fuel surcharge on tickets for short-haul European routes, where it faces stiff competition from low-cost airlines Ryanair and easyJet, were unchanged.<\/P><\/p>\n
Analysts supported the long-haul increase, saying a further such rise was unlikely to deter passengers, with demand still strong for North American and Asian services.<\/P><\/p>\n
“They’ve clearly reached the limit on yield management on where they can go on short-haul and anticipating a weaker winter period. It is pretty clear they think there is more to go on long-haul,” BNP Paribas analyst Nick van den Brul said.<\/P><\/p>\n
BA shares were 0.8 percent weaker at 287.91 pence at 0934 GMT (10:34 a.m. British time).<\/P><\/p>\n
The move follows a decision by Richard Branson’s Virgin Atlantic Airways on Tuesday to raise its fuel surcharges on tickets sold in the country to 30 pounds per flight.<\/P><\/p>\n
Tourism firm TUI’s German airline Hapagfly said on Wednesday it planned to raise fuel surcharges.<\/P><\/p>\n
Germany’s Lufthansa traditionally follows BA’s lead. Its air cargo division raised fuel surcharges to 0.50 euros per kilo from 0.45 euros on Monday.<\/P><\/p>\n
Scandinavia’s SAS said it would raise prices when needed, instead of introducing fuel surcharges, but would review the situation if oil stayed consistently above $60 per barrel.<\/P><\/p>\n
BA said it was maintaining earlier guidance for annual revenues to come in 5.5 to 6.5 percent higher this year despite higher fuel costs.<\/P><\/p>\n
The carrier said on Monday current oil prices were too volatile to make predictions about its fuel bill for the year.<\/P><\/p>\n
By: By Michael Smith
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