BA and Virgin hike ticket prices

BRITISH Airways this afternoon announced it would hike a fuel surcharge on tickets after seeing oil prices remain at record highs.

Virgin Atlantic increased its levy last night and BA followed suit by lifting its long-haul charge by £6 to £16 a flight - £32 for a return trip. The figure for a short-haul trip will increase from £4 a flight to £6.

The price of crude oil surged to a fresh high of $57 a barrel on Friday, up from $43 at the start of the year.

BA described the increase - applying to tickets issued from next Monday - as 'unavoidable' and said it faced a £300m hike in its annual fuel bill.

BA first introduced the surcharge in May when all flights booked in the UK were subject to a £2.50 surcharge. The airline lifted the charge on two more occasions in August and October.

Sir Richard Branson's Virgin Atlantic also lifted the surcharge on a long-haul flight from £10 to £16.

Despite today's increases, an easyJet spokesman said the company did not think fuel surcharges worked and had no plans to impose any.

He said: 'We believe that one of the reasons why the low-cost airline sector has held up over the past six months despite dire predictions is that legacy airlines have put up fuel surcharges on their fares which make us seem cheaper.'

In a trading statement ahead of half-year results in March, easyJet said its profit margins were holding firm despite the recent surge in oil prices.

It expects passenger numbers for the half-year to the end of March to be up 24% on a year earlier. It also said that competition from smaller, low-cost carriers and 'legacy airlines' was unlikely to diminish. Michael O'Leary, chief executive of rival Ryanair, has predicted a 'bloodbath' in the sector.

EasyJet shares, which have gained 26% in six months, soared 9½p to 207¾p in early trading. BA shares were down a ¼p at 264p.