NEW YORK, April 18, 2006 (PRIMEZONE) -- British Airways will increase the fuel surcharge on its longhaul flights from Friday, April 21, 2006, as a result of further rises in the price of fuel.
The longhaul fuel surcharge on tickets sold and issued in North America will increase from $55 (CN$65) per sector to $65 (CN$75) per sector ($130/CN$150 round trip). The shorthaul fuel surcharge will remain unchanged at $19 (CN$24) per sector ($38/CN$48 round trip).
Martin George, British Airways' Commercial Director, said today in London: "Our fuel costs remain a real burden. The price of oil has risen above $70 a barrel and experts anticipate it staying at these levels for some time.
"Our annual fuel bill for 2005/2006 is expected to be some GBP 1.6 billion. We estimated previously that this would rise by GBP 400million in 2006/2007, but at these prices, we would now expect this year's fuel bill to be GBP 600 million higher at GBP 2.2 billion.
"This latest fuel surcharge rise is very regrettable, but we have little choice to pass some of our extra costs on to our customers. Fuel is our second-largest cost after employee costs.
"We believe that it is better to be transparent with our customers by showing the level of fuel surcharge they are paying rather than hide the costs by raising fares behind the scenes like some other airlines choose to do. This approach would enable us to reduce the surcharge should fuel prices fall over time."
The additional fuel surcharge only applies to tickets issued from Friday, April 21, 2006. It does not apply to tickets already paid for and issued.
British Airways will look to increase its fuel surcharges to similar levels on longhaul flights sold in all overseas markets.
Notes to editors:
History of fuel surcharges on all British Airways' flights booked in the U.K. since May 2004.
May 13, 2004: Introduced a GBP 2.50 per sector surcharge on longhaul and shorthaul. For all flights booked outside the U.K. the airline introduced a fuel surcharge of $4 per sector.
August 11, 2004: Surcharge increased to GBP 6 per sector on longhaul. Shorthaul remained at GBP 2.50. Outside the U.K., the longhaul fuel surcharge increased to $10 per sector with shorthaul remaining at $4.
October 14, 2004: Surcharge increased from GBP 6 to GBP 10 per sector on longhaul and from GBP 2.50 to GBP 4 per sector on shorthaul. Equivalent rises in other markets outside the U.K.
March 22, 2005: Surcharge increased from GBP 10 to GBP 16 per sector on longhaul and from GBP 4 to GBP 6 per sector on shorthaul. Equivalent rises in other markets outside the U.K.
June 27, 2005. Surcharge increased from GBP 16 to GBP 24 per sector on longhaul and from GBP 6 to GBP 8 per sector on shorthaul. Equivalent rises in other markets outside the U.K.
September 12, 2005. Surcharge increased from GBP 24 per sector on longhaul to GBP 30 per sector. Shorthaul remained unchanged at GBP 8 per sector. Equivalent rises in other markets outside the U.K.
British Airways is hedged against the cost of fuel. The airline has 65 percent hedging cover between April and June 2006 at $55 per barrel, 55 percent at $57 per barrel between July and September 2006 and 57 percent hedged at $57 per barrel between October and December 2006.
Despite this, the price of oil continues to rise and therefore, the price at which British Airways hedges also increases.
It now costs almost 400 percent more than it did in December 2001 to fill up a plane.
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