British Airways delivered a 27 percent rise in annual profits after higher ticket prices and demand for business-class flights offset soaring fuel costs.
Europe's third-largest carrier also said on Friday its short-haul business was profitable for the first time in a decade and raised its revenue forecasts for this year due to extra income from higher passenger fuel surcharges.
Operating profit for the year to March 31 rose to GBP£705 million (USD$1.32 billion) from GBP£556 million (USD$1.04 billion) the previous year.
A recovery in first and business class traffic and new routes to India and China have helped BA keep planes full, while demand for trans-Atlantic flights was strong.
BA also improved its seat or load factor, with fuller planes as demand for air travel grows.
However, it said fuel costs would rise a further GBP£600 million (USD$1.12 billion) this year to GBP£2.2 billion (USD$4.12 billion), as expected, and yields -- or average passenger fares -- would ease.
BA is predicting a 5-6 percent rise in revenue in the current year, up from a previous forecast of 4-5 percent.
Chief Executive Willie Walsh said the company would continue to focus on cutting costs other than fuel and was confident of avoiding a repeat of last summer's strikes as it negotiates measures to tackle its pension deficit with staff.
"There is nothing on our agenda to signal there will be any difficulties this summer," Walsh told reporters. "We are going to tackle all aspects of the cost base where we can."
While BA paid staff a GBP£48 million (USD$89.9 million) bonus, triggered by achieving an 8.3 percent operation margin, unions said it did not resolve concerns about pensions and a move to a new terminal at Heathrow.
"We will study the detail behind today's very good figures which will inform our complex talks on pensions this summer as well as the forthcoming pay round," the Transport & General Workers Union (T&G) said in a statement.
Walsh also said the company had not made any decisions on whether to buy the new superjumbo Airbus A380 aircraft which made its first landing at Heathrow Airport on Thursday. "We continue to evaluate all options at this stage," he said.
