18th Apr 2006 14:57
British Airways PLC18 April 2006 FUEL SURCHARGE INCREASED British Airways is to increase the fuel surcharge on its longhaul flights fromFriday April 21, 2006 as a result of further rises in the price of fuel. The longhaul fuel surcharge on tickets sold and issued in the UK will increasefrom £30 per sector to £35 per sector (£70 return trip). The shorthaul fuelsurcharge will remain unchanged at £8 per sector (£16 a return trip). Martin George, British Airways' commercial director, said: "Our fuel costsremain a real burden. The price of oil has risen above $70 a barrel and expertsanticipate it staying at these levels for some time. "Our annual fuel bill for 2005/2006 is expected to be some £1.6 billion. Weestimated previously that this would rise by £400million in 2006/2007 but atthese prices, we would now expect this year's fuel bill to be £600 millionhigher at £2.2 billion. "This latest fuel surcharge rise is very regrettable but we have little choiceto pass some of our extra costs on to our customers. Fuel is our secondlargest cost after employee costs. "We believe that it is better to be transparent with our customers by showingthe level of fuel surcharge they are paying rather than hide the costs byraising fares behind the scenes like some other airlines choose to do. Thisapproach would enable us to reduce the surcharge should fuel prices fall overtime." The additional fuel surcharge only applies to tickets issued from Friday April21, 2006. It does not apply to tickets already paid for and issued. British Airways will look to increase its fuel surcharges to similar levels onlonghaul flights sold in overseas markets. ends April 18, 2006 031/GJ/06 Notes to editors: History of fuel surcharges on all British Airways' flights booked in the UKsince May 2004. May 13, 2004: Introduced a £2.50 per sector surcharge on longhaul and shorthaul.For all flights booked outside the UK the airline introduced a fuel surchargeof USD $4 per sector. August 11, 2004: Surcharge increased to £6 per sector on longhaul. Shorthaulremained at £2.50. Outside the UK, the longhaul fuel surcharge increased toUSD$10 per sector with shorthaul remaining at USD $4. October 14, 2004: Surcharge increased from £6 to £10 per sector on longhaul andfrom £2.50 to £4 per sector on shorthaul. Equivalent rises in other marketsoutside the UK. March 22, 2005: Surcharge increased from £10 to £16 per sector on longhaul andfrom £4 to £6 per sector on shorthaul. Equivalent rises in other markets outsidethe UK. June 27, 2005. Surcharge increased from £16 to £24 per sector on longhaul andfrom £6 to £8 per sector on shorthaul. Equivalent rises in other markets outsidethe UK. September 12, 2005. Surcharge increased from £24 per sector on longhaul to £30per sector. Shorthaul remained unchanged at £8 per sector. Equivalent rises inother markets outside the UK. British Airways is hedged against the cost of fuel. The airline has 65 per centhedging cover between April and June 2006 at $55 per barrel, 55 per cent at $57per barrel between July and September 2006 and 57 per cent hedged at $57 perbarrel between October and December 2006. Despite this, the price of oil continues to rise and therefore the price atwhich we hedge also increases. It now costs almost 400 per cent more than it did in December 2001 to fill up aplane. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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