British Airways beat market forecasts today with a 33 per cent rise in annual operating profits after slashing costs and filling more seats on planes.
The carrier, Europe's second-biggest airline, raised its expectations for revenue growth this year but warned its fuel bill was expected to come in £100 million higher than previously flagged due to soaring oil prices.
"It (the result) was better than we expected but the outlook for fuel was a lot higher than we expected," BNP Paribas analyst Nick van den Brul said.
The carrier said it made an operating profit for the year to end-March 2005 was £540 million compared with £405 million last year.
It made a pretax profit of £415 million, up from £230 million last year, but the company said it would not be recommending a dividend.
Chairman Martin Broughton said fuel costs, net of hedging, were expected to rise £400 million this year, up from the £300 million the carrier forecast in March, due to rising oil prices.
BA cut its external spending by £300 million during the year and used technology, including online bookings and self-service check in, to improve efficiency.
However, fuel and oil costs leapt 22 per cent for the year to £1.128 billion. US crude hit a record high of $58.28 in early April. BA and other airlines have been forced to introduce levies on ticket prices to help compensate for the increase.
Chief executive Rod Eddington has cut 13,000 jobs, simplified the airline's fleet and reduced debt during his tenure at BA. He is stepping down at the end of September and will be replaced by former Aer Lingus boss Willie Walsh.