BA says soaring jet fuel costs are hurting profits

The airline said it was raising the fuel surcharge on long-haul tickets to �16 per journey, from �10 at present.

For short-haul passengers, BA said the fuel surcharge would rise to �6 from �4 per trip.

The surcharge will be levied on each leg of a return flight. It comes one day after rival Virgin Atlantic imposed a similar surcharge increase.

"Our fuel bill next year is expected to be an extra �300m," said BA commercial director Martin George.

"With prices continuing to rise, a surcharge increase is regrettably unavoidable."

Not alone

The oil price surge has prompted several airlines to impose fuel surcharges on ticket sales, and many have said profits are suffering.

BA's move comes a day after Virgin Atlantic raised its fuel surcharge to �16. They are competitors on transatlantic routes.

BA blamed high fuel prices for a 40% drop in profits during the final three months of 2004, saying fuel costs rose by �106m, or 47.3%, during that time.

It expects its overall fuel bill to be �1.1bn in its current financial year to end-March 2005, and to hit �1.4bn in its next financial year.

Crude oil prices are continuing to break records. So far this year, the oil industry's two main price-setting products - Brent crude and New York-traded US light crude - have both soared in price by more than 30% a barrel.

Brent crude costs 69% more than 12 months ago, while US light crude has risen 54%.

BA introduced the fuel surcharge in May 2004, and increased it in August and again in October. The latest rise will apply to all tickets booked after 28 March.

Crude oil prices rose ahead of the Iraq war in 2003, and remained high on fears about political instability in the Middle East. More recently, prices have been pushed higher by strong demand from the US and China, coupled with supply bottlenecks.