Shares in British Airways soared 5 per cent today after the carrier reported better-than-expected passenger numbers in December.

A declining oil price also fuelled the rally and by the close of trading BA had gained 11p to 242p, its highest level since July.

The company reported that passenger numbers for the month were up 3.2 per cent to 8.747 million with lucrative first and business class traffic up 6.8 per cent and non-premium up 2.7 per cent.

Analysts said the increase in premium travel was a rare piece of good news for the carrier, which has been dogged by high fuel prices, lower fares due to stiff competition, and flight disruptions.

BA, Europe's second largest airline, reported higher passenger numbers on routes in Europe, Africa and the Middle East but a decline in the Americas. BA attributed this fall to a record comparable month in 2003 due to fare cuts at the time.

The carrier's December passenger load factor - an indication of how successful it was in filling its planes - declined 0.6 per cent to 72.7 per cent.

BA also flagged a non-cash accounting loss of £6 million in the third quarter to the end of December due to a weaker Japanese yen.

But the company said it did not expect any impact on bookings from the Asian tsunami as its flights to the region were limited.

"These numbers in terms of the volumes and mix in December may have been a bit better than we anticipated, and we will see what actually comes through when we get what the revenue numbers actually are," George Stinnes, BA's head of investor relations, told reporters.

BA has axed 13,000 jobs as part of a cost-cutting drive to ensure it survived the industry downturn following the September 2001 attacks in the United States, but was frustrated last year by strike threats, flight disruptions and record oil prices.

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