 High oil prices have weighed on BA's balance sheet |
The persistently high price of oil - currently at a 13-year record - may force airlines to slap a surcharge on tickets, British Airways has warned. US oil futures flirted with the $40-per-barrel mark last week, and are predicted to head even higher.
BA said it was "watching developments closely and looking at our options".
The airline added a temporary fuel surcharge last year, which raised long-haul fares by �10, and short-haul tickets by �5.
Threat to growth
Like all airlines, BA is highly exposed to oil prices, and its shares have been buffeted recently in consequence.
Fuel accounts for 11% of its costs, and higher prices are likely to raises operating expenses by �100m this year, the firm said. The effect on transportation is only one of the many worries economists have about the current oil market.
As energy costs rise across the board, the burden is almost certain to slow economic growth and investment, in particular in those economies - notably Europe and the US - that are dependent on oil imports.
Some analysts are now predicting that US oil prices will hit $50 per barrel, as the peak summer driving season is about to begin.
Unrest in the Middle East, and perceptions of a terrorist threat to oil transportation, have stoked fears of disruptions in supply.
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