Higher oil prices forced British Airways to increase fuel surcharges for the third time this year as it admitted that its fuel bill this year will top £2 billion. Analysts warned that all airline passengers could be affected with other carriers expected to follow suit and drive up ticket prices.
Robert Boyle, BA commercial director, said: "The cost of oil has reached record levels, rising by more than $20 (£9.68) a barrel since we last increased our fuel surcharge in June 2007." From Thursday, the surcharge on flights lasting more than nine hours will rise by £30 to £116 for a return ticket, while the levy for sub-nine-hour long haul flights to destinations such as New York will increase by £20 to £96. The surcharge on return short-haul flights will increase by £4 to £20.
KLM, the Dutch arm of Air France, also announced an increase in surcharges yesterday, which followed recent increases by Ireland's Aer Lingus and Virgin Atlantic.
Yesterday's announcement is the airline's first surcharge increase since it was fined a total of £270 million in August by the US department of justice and the Office of Fair Trading for colluding with Virgin Atlantic over the setting of fuel levies. British Airways admitted that members of staff had breached competition law by discussing planned surcharge increases with the airline's arch rival. (source: Google News)
Vodafone today raised its forecasts for annual revenue growth but sounded a note of caution for the second half of the financial year due to "competitive" pricing in the European market. Vodafone expects full-year revenues to reach between £34.5 billion and £35.1 billion, against a previous range of between £33.1 billion and £34.1 billion. Shares in Vodafone rose 2.86%, up 5.2p, to 187.2p in early trading.
Analysts had been expecting the operator to increase its forecasts after upbeat statements from rivals, France Telecom and Spain's Telefonica in recent weeks. Vodafone has been focusing on revitalising the business after it reported a £14.9 billion loss two years ago, the biggest loss ever made by a European company.
Today, the company reported sales for the six months to September 30, 2007, up 9% to £17 billion, with organic growth up 4.4%. Pre-tax profit over the first half of the year rose to £4.5 billion from a £3.3 billion loss in the comparable period.
On further expansion, Arun Sarin, chief executive at Vodafone, said “the group will wait for the end of a strategic review at Vodacom, its South African joint venture with local fixed-line incumbent Telkom, before increasing its 50% stake.”
The review is expected to take “a couple of months” and Mr Sarin said: "At the point we will have a better idea of what is available at Vodacom, if there is a stake available at the right price."
Mr Sarin declined to say by how much it will raise its stake in Vodacom but said: "The remainder of the shares will be listed, we will not take the whole 50 per cent." (source: Timesonline)