Headwinds becoming ever stronger at BA

Standby for more fuel surcharges from British Airways. As the oil price surges ever higher, we can expect a lot more of them

Here’s a frightening statistic to illustrate the nature of the problem. If the oil price were to rise to $120 (
So far, BA has been able to recover around two thirds of these rising costs through surcharges, but, the way prices are climbing, it is plainly only a matter of time before the company runs into the law of diminishing returns.

BA’s finance director, Keith Williams, warns that a price of $120, if sustained, would force “fundamental change” in the airline industry. The world economy has so far weathered the high oil price surprisingly well, but, judging by BA’s comments, it is on the cusp of causing real damage.

Independent