British Airways expects revenue rise up to six percent

British Airways PLC said Wednesday that it expects revenue to rise by 5 to 6 percent in 2007/08, based on increases in capacity and traffic.

The revenue forecast was based on a 1.3 percent rise in capacity and a 2.4 percent increase in traffic, BA said in a statement to the London Stock Exchange to mark its annual investor day, the AP reports.

The airline added that it expects its fuel bill to rise by 100 million pounds (US$192.8 million; EUR 147.2 million) and its total costs excluding fuel to increase by 50 million pounds (US$96.4 million; EUR 73.6 million). That would leave it on track to achieve a 10 percent operating margin in the 2007/08 financial year, which begins on April 1.

BA shares were 2 percent higher at 517 pence (US$9.97; EUR 7.61) in midmorning trading, making up some of the drop in the stock in recent days that was caused by a draft "open skies" agreement between the United States and the European Union.

That deal, if ratified by both sides, would expose BA to more competition on trans-Atlantic route. More than 50 percent of the airline's profits come from Americas routes.

If a deal is approved, an open skies policy could come into force in late October.

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