LONDON (AFP) - British Airways said it expects high oil prices to drive up its annual fuel bill by 245 million pounds (350 million euros, 455 million dollars), though this would be partly offset by customer surcharges.
Fuel costs net of hedging are now expected to be 20 million pounds more than a previous estimate for the year to March 2005, the company said alongside its interim results.
Passenger and cargo fuel surcharges forecast at 160 million pounds for the year will partially offset this increase.
"Consequently, our focus will remain on reducing both controllable costs and debt," said chairman Martin Broughton.
BA also reported second-quarter pretax profit at the top end of market expectations, and left its revenue guidance unchanged.
The carrier still expects a two-three percent improvement in year to March 2005 total revenue, driven by volume increases.
"Market conditions have remained broadly unchanged since our last report," said Broughton. "All market segments remain price sensitive and yield declines are expected to continue."
For the three months to September BA made a pretax profit of 220 million pounds.
That compared with analyst forecasts of 147-220 million pounds and pretax profit of 105 million in the same period of last year, which included a wildcat strike by Heathrow check-in staff which cost the airline 40 million.
The quarterly figure took the result for the half-year to 335 million pounds against 60 million last time.
Group turnover revenue in the second quarter increased by 2.2 percent to 2.03 billion pounds.
Second quarter yields, or average fares, were down 5.1 percent.
Net costs were reduced by 3.2 percent, unit costs fell 6.1 percent and net debt was cut to 3.3 billion pounds -- the lowest level since 1993. But BA again omitted an interim dividend.
11/08/2004 - 09:30 GMT - AFP