BA increases fuel surcharge
Dan Milmo, transport correspondent
Saturday April 28, 2007
The Guardian
British Airways has raised its fuel surcharge, months after reducing the levy in response to a falling oil price and cuts by competitors.
BA said the surcharge on long-haul flights lasting less than nine hours - to the east coast of the United States, Canada and Africa - will rise from £60 to £66 for a return fare. The levy on longer flights will climb from £70 to £76.
BA reduced the levy in January when oil was $53 a barrel, but announced a reversal yesterday with the price at $68. Robert Boyle, BA's commercial director, said: "The cost of fuel has risen significantly in recent weeks. Unfortunately, we have little choice but to pass on some of this extra cost to our customers."
BA said its fuel bill, its second largest cost, will be £2bn for the current financial year. This month Virgin Atlantic raised its surcharge from £60 for a return flight to £68 for sub-nine hour flights and £76 for longer ones. Fuel surcharges were introduced by BA and Virgin in 2004.
It also emerged yesterday that the private equity group in talks with BA about a bid for Spanish airline Iberia has teamed up with a Madrid buyout firm. TPG has joined forces with Vista Capital and is continuing discussions with BA, which owns 10% of Iberia and confirmed this week that it has approached private equity players about bidding for the carrier.
Any bid needs a strong Spanish element because aviation treaties between Spanish and Latin American governments state, in effect, that more than 50% of the Iberia must be owned by a Spanish company.
BA is also in talks with Apax Partners, the British private equity house, about an Iberia takeover.