British Airways and Virgin Atlantic will tomorrow double their fuel surcharge for long-haul passengers after seeing oil prices continue to soar.

The charge for a single long-haul flight will rise from £2.50 to £6 with the surcharge for a return journey rising to £12.

BA said the move, which follows a 45 per cent rise in fuel prices in the past 12 months, is expected to recoup £70 million for the airline.

Crawley-based Virgin said the decision had been taken "in light of the recent increases in the price of oil - which reached a new high last week"

Yesterday BA said it had achieved pre-tax profits for the three months to June 30 of £115 million, up from a loss of £45 million a year earlier.

But chief executive Rod Eddington - who described the results as reasonable - said fuel and employee costs were the biggest challenges facing the airline.

The surge in oil prices means BA faces a fuel bill of more than £1.1 billion in the 2004/5 financial year - £225 million more than last year and £70 million higher than estimated in May.

The recovery in profits has also been helped by the company's Future Size and Shape strategy, which has removed about 13,000 posts in the past two years.

About 3,000 of those jobs were lost at Gatwick, where BA is embroiled in a pay row with baggage handlers and check-in staff.

Mr Eddington has also targeted £300 million of savings from changes to working practices while reductions in external spending have been identified.

BA said short-haul premium traffic volumes were operating at lower levels with the non-premium sectors subject to strong competition on prices.

The BA chief said the airline industry remained "very competitive" and he conceded the firm would not make money on its short-haul business this year.

The increase in profits was not unexpected because of the effects in recent years of the Sars epidemic and the war in Iraq, he added.

Mr Eddington said BA would continue to cut employment costs and would not replace some staff who retired or resigned.

But he added the company would make sure it had "sensible" staffing levels in areas including customer service and cabin crew.

Low-cost airlines such as easyJet and Ryanair, in the grip of a fierce price war, have so far resisted imposing a fuel levy on their passengers.

Tuesday August 10, 2004