British Airways Posts Profit on Cost Savings, Traffic

British Airways Plc, Europe's second- largest airline, posted a first-quarter profit of 70 million pounds ($129 million) as the carrier cut costs and traffic rose.

The net income was 6.4 pence a share, for the three months ended June 30, compared with a loss of 63 million pounds, or 5.9 pence, a year earlier, the London-based company said in a Regulatory News Service statement. Revenue rose 5.1 percent to 1.93 billion pounds.

British Airways Chief Executive Rod Eddington, 54, cut 13,000 jobs and slashed costs by 869 million pounds over three years to counter competition from Ryanair Holdings Plc and Richard Branson's Virgin Atlantic Airways Ltd. British Airways traffic rose 10 percent in the quarter.

``The price of crude oil has soared and we now expect our fuel bill to be 225 million pounds higher than last year,'' said Eddington in the statement. ``As a result we will increase our fuel surcharge on all longhaul sectors.''

British Airways was expected to post a profit of 69 million pounds, according to the median estimate of nine analysts surveyed by Bloomberg News last week.