LONDON (Bloomberg) — British Airways, Europe’s third-biggest airline, said traffic fell 0.5 percent in December as three successive days of fog caused cancellations and delays in London.The load factor, or proportion of seats filled, fell 0.3 percent to 73.9 percent, London-based British Airways said today in a statement. The airline carried 2.69 million passengers, a decline of 1.2 percent.

Dense fog at Heathrow airport prompted British Airways to scrap more than 800 flights between December 20 and 23, including all services within the UK for three days. The disruptions probably hurt earnings in the three months through December, the company said December 22, without specifying a figure.

George Stinnes, the airline’s head of investor relations, described December’s figures as “good” in the context of the fog disruptions, on a conference call with journalists. He declined to say how much the cancellations would affect the company’s earnings.

British Airways had to pay for some 5,000 hotel rooms for displaced passengers, Stinnes said. It ran about 80 percent of its flights during the period of disruptions.

Premium traffic, or first- and business-class, rose 2.8 percent. Economy traffic fell one percent, British Airways said.

“The market is still very competitive,” Stinnes said. “There’s a little bit of weakness on the North Atlantic,” due to a decline in leisure traffic. British Airways has cut spending to boost profit amid competition from low-cost carriers including Ryanair Holdings Plc and EasyJet Plc.

The airline is trying to resolve a $2.1 billion ($4 billion) pension deficit while preparing to drop 34 Boeing Co. planes and pay for new, more fuel-efficient airliners.

The company is still in talks with Amicus and the Transport & General Workers unions to avert a cabin crew strike this winter, it said. The discussions centre around retirement ages and pension contributions.

British Airways said it needs to solve the gap in pension funding before it upgrades its fleet, including replacement of 34 Boeing Co. airliners with more fuel-efficient planes.

Stinnes said that he would like to grow the company’s fleet by four percent in 2009 and 2010, provided the pension gap is closed. The company could make an announcement about buying five or six wide-bodied aircraft in the next few months, he said.

In a separate statement, Tesco Plc announced a joint venture with British Airways Pension Fund to realise $445 million from the grocery company’s UK property portfolio.

Britain’s biggest supermarket chain will sell 16 of its stores and then lease them back over a maximum period of 20 years. The Pension Fund, which is run by trustees and operates independently of the airline, will invest the money.