BA World Cargo set to reduce fuel surcharge

British Airways World Cargo plans to lower its fuel surcharge to 84 pence (Dh5.9) from the current 87 pence on August 21.

The move comes after the fuel index fell below the level 26 threshold for the second week running.

"High fuel prices remain a very real challenge for the industry," said Adam Carson, Senior Manager, Revenue Management. "However, recent weeks have seen some relief with prices falling, triggering a decrease in our fuel surcharge in line with the index."

BA World Cargo has increased its fuel surcharge a total of eight times since the beginning of this year when it stood at 55 pence. Last month the surcharge was increased twice, from 81 pence to 84 pence and then to 87 pence. "The rise in fuel prices necessitated the increases," added Carson.

BA World Cargo recently announced it had posted a 22 per cent increase in commercial revenue to £178 million (Dh1.3 billion) for the first quarter of its financial year. However its fuel bill for the same period was up 51.2 per cent on the previous year.

The company carried 1,237 million cargo tonnes kilometres during the period, an increase of 4.1 per cent compared with last year despite cargo capacity being down three per cent.

Managing Director Steve Gunning said: "With both the price of fuel continuing to be high and consumer demand on the high street uncertain, there are difficult times ahead for carriers.

"Our focus over the coming months will be on delivering a robust cargo operation for our customers, which in turn will ultimately support the corporate financial goals of British Airways."

BA reported an overall 88 per cent drop in profits before tax for the period from April 1 to June 30, 2008, to £37 million, down from £298 million in 2007.

The company has blamed the poor results on higher fuel costs, which it said were up 49 per cent during the three months.

British Airways and Spanish national airline Iberia are in talks over a merger as high fuel prices and the global economic situation begin to affect businesses. If successful the two companies would form the world's third largest airline.