BA and Iberia likely will increase fuel surcharges and fares to
compensate for the winding down of favorable fuel hedging arrangements in 2012,
warned Willie Walsh, chairman of the carriers' parent, International Airlines
Group. "We've been somewhat cushioned [from rising fuel prices] because we've
had effective hedging in place," Walsh on Friday told BBC Radio. "We
will be looking to recover some of that through increased surcharges and fares."
Even with effective fuel hedging in place, IAG's fuel costs during the
first nine months of 2011 increased 28.5 percent year over year, according to
the company's most recent financial results. Operating profit for the quarter ending
Sept. 30 was €363 million, down from €528 million in the same period last year.
Pre-tax profits for the first nine months of 2011, however, increased to €355
million from €63 million last year.
Premium traffic for BA and Iberia combined was up
1.9 percent year over year, a marginally higher growth rate than October 2010
(up 1.8 percent) but significantly lower than September 2011 (up 9.3 percent). "Although
we saw some demand softness in October, forward bookings for premium cabins are
currently broadly in line with levels seen last year," according to an IAG
statement.
Overall, IAG's traffic in October increased 1.9 percent year over year
while capacity rose 2.7 percent. For the combined group's North American operations,
total passenger count grew 7.4 percent.