British Airways will reduce fuel surcharges on cargo this week, but said on Wednesday there were no immediate plans to cut a levy on passenger tickets despite falling oil prices.

The airline's cargo division, BA World Cargo, said it would cut its fuel surcharge to 20 pence per kilo gram from 23 pence following recent fuel price declines. The decrease takes effect on Thursday.

BA and other major airlines raised surcharges on cargo and passenger services in October last year when oil prices hit record highs of over USD$55. Prices have since fallen by almost USD$12.

However, BA said there were no immediate plans to reduce controversial fuel levies for passengers which were introduced in May to offset the higher fuel costs and were raised a second time on long-haul flights in October.

"We will be keeping the level of the passenger surcharge under constant review," a BA spokesman said.

Unlike passenger fuel surcharges, the airline's cargo charge is tied to the average price of aviation fuel in four key spot markets.

Analysts said airlines remained under pressure to retain fuel surcharges which were being used in some cases to offset dramatic reductions in average ticket prices due to stiff competition.

"This raises a very interesting issue of what happens to passenger surcharges," said aviation analyst Chris Tarry of industry consultancy Ctaira. "There seems to be a hope on the part of some airlines they can consolidate it into a general fare rise."

Lufthansa Cargo also lowered its fuel surcharge this week but has not announced any plans to reduce passenger surcharges.

BA said in November its fuel bill for the year to March 2005 would be GBP