British Airways expects to hit its target of a 10 per cent operating margin in the year ended March 2008, it said today as it unveiled plans to cut £450 million of costs by that date.
Europe's third-largest airline said it expected fuel costs for the year to March 2006 to be between £505 million and £515 million higher than the previous year.
This is down slightly from its previous forecast of £525 million.
At 8.45am, shares in BA were up 2.2 per cent at 323-3/4 pence, one of the biggest risers on the benchmark FTSE-100 index .
The company said it expected fuel costs would be up around £400 million in the year to March 2007.
Revenues were forecast to rise between 4 and 5 per cent next financial year, driven by increased capacity and filling more seats. Excluding fuel, costs for the year to March 2007 would be flat, it added.
BA declined to provide details of its plan to reduce costs but said this would put it on track to hit a key profitability target.
"This will leave the company on track to deliver a 10 per cent operating margin in the year to March 2008 assuming fuel prices and external environment are stable," the firm said in a brief statement.
