British airline Virgin Atlantic said market conditions had become tougher in recent months due to higher fuel prices and weakening consumer confidence, with this week's London riots and U.S. market turmoil unlikely to help sentiment.

The airline, whose most popular flight routes are between London's Heathrow airport and North America, on Wednesday reported a pretax profit of 18.5 million pounds (US$30 million) in the year to March, compared to a loss of 132 million pounds in the same period a year ago. It said revenues grew 13 percent to 2.7 billion pounds.

Virgin Atlantic, majority owned by British billionaire Richard Branson's Virgin Group, said revenues in the first quarter of its new fiscal year had jumped 7.6 percent to 658 million pounds but that recent trading conditions had become more challenging.

"We've seen a tightening market since the end of last year, with the main challenges being taxation, fuel prices, consumer confidence and making sure capacity is balanced," Steve Ridgway, Virgin Atlantic's Chief Executive told Reuters.

Recent rioting in London, sparked by the fatal shooting by police of a man, and the downgrade of the United States' credit rating could, however, dampen the mood of consumers further, said Ridgway.

"Over the long-term consumer confidence is very important to us and it was pleasing London had a quiet night last night in terms of riots -- these things all affect sentiment," he said.

Air France and Lufthansa last month reported results battered by high fuel costs and said capacity would not grow as quickly as previously planned over the winter. In the U.S., shares in Delta Air Lines fell to a year low after it said fuel costs grew at a higher rate than revenue.

"Our fuel bill was over 1 billion pounds (in 2010/11)," said Ridgway. "It's (the fuel bill) gone down in recent days due to worries in the market but I guess you'll see that go back up -- but we have a three year strategy and hedge somewhere between 70 and 80 percent and build the book all the time."

While air travel has picked up since the 2008/2009 global downturn, fuel costs, political unrest and a drop in traffic caused by the March 11 Japanese earthquake and tsunami are causing headaches for airlines across the world.

Industry body IATA last month said premium traffic had slumped because of Japan's nuclear crisis, weakening world trade and Middle East turmoil and that the soft patch could continue for the next few months.

However, International Airlines Group , formed by the merger of BA and Iberia -- Virgin's main rival at Heathrow -- defied the gloom by swinging to a profit in the first half and predicting full-year earnings growth.

Virgin Atlantic -- whose pilots this week voted to accept a pay offer, ending the prospect of strike action -- said cargo revenues increased 39 percent to 224 million pounds in 2010/11 and that it would spend 100 million pounds on product development over the coming year. (US$1=0.617 British Pounds)