British Airways flights are taking off with almost a quarter of their seats empty after higher air fares and a slowing economy led to 87,000 fewer passengers using the British flag-carrier last month.

The airline said it carried 2.9 per cent fewer passengers than the same month last year with traffic to Africa, the Middle East and the United States being the weakest.

The load factor on BA's aircraft, a measure of how full each plane is when it flies, fell 3.8 percentage points to 76.7 per cent. That means nearly one in every four seats is now empty on BA flights.

The traffic figures are disappointing because June usually produces an increase in the number of passengers because people begin their summer holidays.

BA blamed the fall on “significant” increases in ticket prices because of the record high price of oil and a tough consumer environment in the UK.

The high cost of fuel is troubling all carriers, and American Airlines gave warning yesterday that it could cut 7,000 jobs and ground yet more aircraft. It expects to take a one-off charge of $1.3 billion (£656 million) to cover the cost of redundancies.

In an attempt to reduce costs further BA, American and Iberia, the Spanish flag-carrier, are expected to try to merge their operations this month.

The Times reported yesterday that the three airlines were close to seeking approval from competition regulators to press ahead with the deal.

A BA official said yesterday: “BA has been in talks with American Airlines and Iberia for some time, but no decisions have been reached.”

The proposed merger has been attacked by rivals, including Virgin Atlantic, who claim it will limit competition.

A Virgin spokesman said: “We would oppose this attempt to create an anticompetitive alliance. It would form a dominant mega-power on transatlantic air routes from two of the largest EU members, forcing up ticket prices for passengers and restricting choice.”

BA has responded to higher oil costs by increasing the fuel surcharge added to ticket prices but this appears to be affecting demand for its flights.

The June traffic figures show that revenue per passenger km (RPK), an industry standard measure of the value of each passenger carried, fell by 3.7 per cent. The fall was most severe in long-haul economy, which fell by 3.8 per cent. Business class travel was down by 3.1 per cent.

Geographically, the drop in RPK was most pronounced in the Middle East, which was down by 10 per cent. RPK in the US fell by 3.5 per cent, but the UK and Europe showed a 2 per cent rise, possibly indicating that people are taking holidays closer to home to save money.

On a positive note, BA said that it had carried 3.3 per cent more cargo.

Hanging on

— IATA, the air travel industry body, said that International air traffic held up against the economic slowdown in May, rising for the first time in three months to 74.3 per cent.

— The figure shows a rise of 6 per cent on May last year.

— North American airlines' international traffic grew by 8.2 per cent, and domestic capacity fell by 3.3 per cent.

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