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British Airways says June traffic fell 3.7 percent

LONDON - British Airways said on Thursday its traffic fell by 3.7 percent in June, as both premium and economy business weakened compared to last year.

The company said in a statement the difficult consumer environment had led to reduced traffic, while high fuel costs had caused the airline to hike fares.

The figures compared with a 0.7 percent fall in May, and were worse than a 1.5 percent drop forecast by analysts at Citigroup, though Gert Zonneveld at Panmure Gordon said a general fall had been anticipated by the market.

"We were expecting a decline in premium and non-premium traffic, and we got one," he said.

The shares, which had been over 1.5 percent higher in earlier trade, dropped back to be flat at 204 pence by 1348 GMT, valuing the business at around 2.35 billion pounds ($4.67 billion).

BA said the group's core premium, or business class, passengers fell 3.1 percent year on year, while economy fares were down 3.8 percent. BA's load factor -- a measure of how well it fills planes -- fell 3.8 percentage points to 76.7 percent.

"Brent crude oil prices have risen from $110 per barrel at the beginning of May to $147. Significant increases have been made to prices including surcharges reflecting this rise in costs," the airline said in a statement.

"The UK consumer environment is difficult leading to reduced traffic volumes," it added.