British Airways Plc, Europe's second's largest airline, posted a fall in third-quarter profits after higher fuel prices increased costs, but raised its outlook for full-year revenues.
BA, which is cutting fares amid tough competition from low-cost rivals, warned that yields -- average revenues per passenger -- were still expected to decline but sales would be slightly better than it forecast previously.
"For the year to March 2005, the total revenue outlook is slightly better than previous guidance with a 3.0-3.5 percent improvement anticipated," Chairman Martin Broughton said in a statement.
BA had previously forecast a 2 to 3 percent lift in full-year revenue.
BA said pretax profit for the three months to the end of December was 75 million pounds ($141 million), compared to 125 million pounds a year ago.
The result was higher than market expectations of £59 million, according to a Reuters poll of 10 analysts. Forecasts ranged from 15 million pounds to £77 million.
Fuel costs in the period increased by £106 million as flagged by the company after oil prices hit record highs last year. Part of the burden was offset by revenue from surcharges on passenger tickets and cargo.
Fuel surcharges and an increase in cargo revenue helped buoy turnover which edged 4.3 percent higher to 1.973 billion.
BA also reported January passenger numbers rose 8.1 percent in January.
Low-cost rival Ryanair raised expectations earlier this week when it upgraded its outlook, saying it was cashing in on the woes of other no-frills airlines and yields were expected to improve.
BA has axed 13,000 jobs as part of a major cost-cutting drive to ensure it survived an industry downturn following the September 2001 attacks on the United States, but faced further frustration last year from strike threats and flight disruptions.
The airline's shares, which are trading at their highest level since June last year, closed on Thursday 0.3 percent weaker at 271-1/4 pence.
By: N. Peter Kramer
