BRITISH Airways announced yesterday it was letting passengers bear the brunt of rising oil prices despite turning around its fortunes in the first quarter.

The airline said it would more than double its fuel surcharge for long-haul passengers following turmoil in the oil markets, with the cost of crude rising above the $40 mark.

From Wednesday, the charge for a single long-haul flight will rise from £2.50 to £6 with the surcharge for a return journey rising to £12.

The move, which follows a 45 per cent rise in fuel prices in the past 12 months, was announced as BA said it had achieved pre-tax profits for the three months to June 30 of £115m, up from losses of £45m a year earlier.

The first quarter performance, described as reasonable by chief executive Rod Eddington, was at the top end of market expectations.

Mr Eddington said fuel and employee costs represented the biggest challenges facing the airline, which is involved in a pay dispute with baggage handlers and check-in staff.

It is also braced for higher pension contributions of £133m a year. The surge in oil prices means BA faces a fuel bill of more than £1.1bn in the 2004/2005 financial year - £225m more than last year and £75m higher than estimated in May.

By increasing the fuel surcharge for long-haul customers, the company estimates it can recoup £70m of the extra fuel costs.

With passenger numbers improving, BA said revenues grew 5.1 per cent to £1.9bn in the three months to June 30.

Operating profits of £150m compared with £40m for the same period last year, when the Iraq war and the Sars outbreak led to what has been described as the most testing period in aviation history.

Mr Eddington said: "These are reasonable results but currently, fuel and employee costs remain our biggest challenges."

The increase in the fuel surcharge will apply to new bookings made in the UK.

The short-haul fuel surcharge will remain unchanged at £2.50.

The recovery in profits has also been helped by the company's Future Size and Shape strategy, which has removed 13,000 posts in the past two years.

Mr Eddington has also targeted £300m of savings from changes to working practices, while reductions in external spending have also been identified.

BA said it continued to forecast a improvement in revenue of up to three per cent in the current financial year, helped by the recovery in long-haul traffic.

It said that short-haul premium traffic volumes were operating at lower levels, with the non-premium sectors subject to strong competition on prices.

Mr Eddington dismissed rumours that he planned to stand down from the job at the end of next year.