BRITISH Airways reported a 40 per cent fall in third-quarter profits but said the number of passengers last month rose by 4.3 per cent.

BA, which employs about 1,000 people in the region, including 800 at a call centre in Newcastle, said pre-tax profits in the three months to December 31 fell to £75m from £125m a year ago.

The figure lifted BA's nine-monthly profits to £410m, against £185m last time.

It said the number of passengers carried in January increased to just over 2.6 million from 2.5 million in the same month last year.

Chief executive Rod Eddington described the quarterly results as respectable against a background of a 47.3 per cent, or £106m, rise in fuel costs.

"Our focus remains on reducing controllable costs and debt while continuing to invest in our products," he said.

Along with other issues, BA has been battling soaring fuel costs, higher wage awards and increased pension contributions.

It has identified employee costs as an area of concern after pay deals and higher pension payments offset the progress achieved by 13,000 job cuts.

In December, it said its UK airports director had left the group, four months after a shortage of check-in staff led to thousands of passengers being stranded by cancellations and delays at Heathrow, which is believed to have cost BA £5m.