British Airways warned that economic pressures on passengers may begin to hit demand for flights as it reported May traffic down 0.7 percent year-on-year.

The company, which raised its fares last week to offset the soaring cost of fuel, said long-haul economy travel was already weak and that it remained to be seen how regular flyers would cope with having less disposable income.

“We have not seen a significant impact on volume so far, but clearly the pressure on people’s budget is greater today than a year ago,” BA head of investor relations George Stinnes told reporters, citing higher petrol costs and utility bills as factors.

“Customers are fairly accepting of a (rise in) fuel surcharge; they know it is a cost being passed on ... But it depends on how essential people think foreign holidays are,” he said, adding that short-haul weekend breaks were particularly vulnerable to a downturn.

British Airways said short-haul business travel as well as long-haul economy travel were weak last month, though long-haul premium traffic, which includes the key London-New York route, was slightly ahead of last year.

The decline in passengers came alongside a 1.5 per cent decrease in load factor, a measure of how well it fills its planes, to 71.8 per cent.

Shares in the airline were up 5.5 percent at 243.5 pence by 1456 GMT, valuing the company at£ 2.8 billion. However, analysts said this was more to do with the falling oil price than the figures. “These numbers are weak,” ABN AMRO analyst Andrew Lobbenberg said.

The figures come as global airlines face a potential crisis, with record oil prices pushing up the cost of aviation fuel. BA said last week it would increase ticket prices with a larger fuel surcharge from June 3 in a bid to combat the higher costs.

Chief executive officer Willie Walsh told Reuters on Monday he expected to trim capacity this year, also due to the oil price.

“If demand falls, capacity has to come out,” Stinnes said, adding that the detail of any cutbacks had yet to be worked out.