I am sure most peeps will know this is my favourite airline - I fly them and I buy them.

Currently I hold a quarter unit as a longer term investment which is also useful for shareholder benefits.

I will be looking to substantially add at the right time and not afraid to trade them either intraday or more probably as a swing trade.


ains




Shadow of conflict looms large over British Airways as firm fights to recover

TRACEY BOLES - Scotland on Sunday

BRITISH Airways will warn that the prospect of war with Iraq casts a long shadow over its full-year this week when it posts third quarter figures in line with expectations.

Lord Marshall, the BA chairman, is expected to tell analysts that political uncertainty could push the airline, still struggling to recover from the effects of September 11, further into reverse.

"Iraq is a key driver for everything," said a source close to the airline.

BA has admitted privately to analysts that transatlantic bookings for this March are "appalling" as the uncertainty stirred up by the prospect of war exerts an influence. Earnings estimate downgrades are now highly likely.

However, analysts believe a loss for the full year is still not on the cards.

Pre-tax estimates for the full year currently stand at up to 140m. BAs performance, which represents a strong recovery from the 180m loss posted in the equivalent quarter after September 11, has been driven by a vigorous cost-cutting programme rather than by revenue, which is still flat.

It will announce tomorrow that it is on track to achieve cost savings of 450m by the end of March through a process of shedding jobs and loss-making routes under its future size and shape strategy.

By the end of next month 10,000 jobs will have gone under the programme. "BA has weathered the storm better than most by getting costs under control," said one analyst. "In Europe, only Iberia has done likewise."

Third quarter operating profits are expected to be around 30m to 40m, in line with analysts expectations, with pre-tax figures between a 10m loss and 5m profit. The consensus is break even.

The airline has impressed experts by taking the threat posed by low-cost carriers seriously.

Geopolitical and economic problems are affecting demand air travel, especially on long-haul routes. BAs premium services are still under pressure, recent traffic figures revealed.

A speedy Gulf war will lead to a relief rally for the airline sectors shares which are depressed at the moment. However, BA itself has warned that prolonged conflict could trigger a slump in aviation equivalent to that seen after September 11.

Chris Tarry, former aviation analyst at Commerzbank who now runs CTAIRA said: "I believe that the last quarter has been very tough on the revenue side and indeed they have indicated this themselves.

"Unfortunately the outlook is no better - even without a war. The reality of the economic situation in the UK was underlined with the rate cut.

"Add to that the structural downward shift in fare levels and then the uncertainty over war - it doesnt bode well.

"Furthermore, given the uncertainty caused by Iraq let alone an actual war, it is pretty clear that the transatlantic market will be dire in the summer."

BA has traditionally depended on transatlantic traffic for its revenue.

Shells chairman, Sir Philip Watts, also admitted last week that the oil giant was preparing for "uncertain times" ahead.

He said Shell had looked at the range of possibilities that could occur and had "a plan for every eventuality".

I would never of course enter into an argument with ains, he is unbeatable, but if the war turns nasty, we will think 60p was a high.

interestingly, I do always seem to do a lot better than the shorters .... when I bought at just below 90p last week - peeps were talking of silly downsides ... but sold them for a masive gain just a few days later ....



ains

Pulling back earlier mark downs


03/19 08:48
British Airways, Rivals' Stocks Drop on Possible S&P Downgrades
By Lois Jones


Frankfurt, March 19 (Bloomberg) -- Shares in British Airways Plc and its three biggest European rivals plunged after Standard & Poor's placed European and U.S. carriers on review for a possible credit-rating downgrade amid concern a war in Iraq would raise fuel prices and damp demand.

British Airways shares dropped as much as 7.5 pence, or 6.4 percent, to 110p. Air France SA shares fell as much as 38 cents, or 3.7 percent, to 9.83 euros. Deutsche Lufthansa AG shares fell as much as 43 cents, or 4.7 percent, to 8.65 euros. KLM Royal Dutch Airlines NV stock plunged as much as 39 cents, or 6.1 percent, to 6 euros.

S&P said it may downgrade British Airways, Lufthansa and nine U.S. airlines' ratings as an Iraq war would further damage an industry that's already reeling from losses and traffic declines following the Sept. 11 terrorist attacks.

``Airlines, already battered by the effects of the Sept. 11, 2001, attacks and their aftermath, now face further financial damage from a war,'' said Standard & Poor's credit analyst Philip Baggaley in an e-mailed statement.

A war in Iraq may reduce Lufthansa's traffic by as much as 20 percent, Lufthansa Chief Executive Juergen Weber has said. Lufthansa said on Feb. 26 it will ground 46 planes, reduce investment by 200 million euros ($213 million) and freeze hiring. The carrier is raising fares by an average 4.5 percent as the threat of an Iraq war boosts fuel costs.

In addition to British Airways and Lufthansa, S&P placed the following airlines on CreditWatch, indicating possible downgrades: Delta Air Lines Inc., the third-largest U.S. carrier; No. 4 Northwest Airlines Corp.; No. 5 Continental Airlines Inc.; AirTran Holdings Inc.; Alaska Air Group Inc.; America West Holdings Corp.; ATA Holdings Corp.; Atlantic Coast Airlines Holdings Inc., and Southwest Airlines Co.

I shorted at 108p, and am happy to await really big profits, I rarely stop a short for less than 50% profit in these `bad` (for some ) markets.
I realise ains will make a lot more than I as he uses huge sums of money on his investments, I rarely risk more than 50,000 on any one shot, using other shares as colateral, so no cash ever changes hands, exept generally into mine.

You're quite a small player then, quidnunc. From earlier comments I thought you were playing for more than just pin money.

Yes , just a tiddler compared to ains

A three % drop so early in the day is encouraging, the war will start tomorrow mid-day we are informed, so any one long , be careful.

If you shorted at 108p ..... you are down 6% or so and it has been worse .... my trades were cashed at good net profits. Always worth saying that even if they go broke you can only make 100% and that's not likely ..... in real life waiting on 60p is not realistic and I doubt you will .... but anyone who joined me at sub 90p as a for instance could have already banked 35/40% and played them again ... all at less risk than you are taking

Don't let me put you off though - someone needs to short to get the price down and give us the signal to buy



ains

ains, of course I may not make it , its a target, but nothing is impossible when the bullets are flying past the wing tips, grounding BAY for a week would not be good for the price, not ever wishing to doubt you of course, I see the risks long or short at the moment more on the shorters side, depends on the Palace Guards performance really.

Hmmmmmmm ..... now 120p or thereabouts ..... volumes 50% up on average daily volume already .... In a new survey of the top Euro Airlines they came 13th for punctuality out of 23 (budget airlines are not included) with 72% of all flights arriving on time ..... BA blamed the airport and traffic control for the late flights



ains

19 Mar 2003 14:33 GMT



Israeli business sector seeks BA boycott



TEL AVIV (Reuters) - Israel's Manufacturers Association, an influential industry group, has called for a boycott of British Airways in response to the airline's decision to suspend flights to Tel Aviv.
British Airways BAY.L , one of the largest foreign carriers operating out of Israel, said on Tuesday it will suspend flights to and from Tel Aviv starting Wednesday night and until further notice.

The British carrier was the first foreign airline to suspend service to Israel but it is believed others will soon follow in light of growing expectations that a U.S.-led attack on Iraq is immiment.

"It is not acceptable that an airline, whichever it may be, will boycott Israel without any reason, when Israel is not involved in the war in Iraq," Manufacturers Association President Oded Tyrah said in a statement.

Tyrah is also chairman of the forum for coordination among Israeli economic organisation.

On Monday, Britain's Foreign Office advised against all travel to Israel. It said British nationals already in Israel were advised to leave as soon as possible unless their presence is essential. British nationals in the West Bank and Gaza should leave immediately.

The airline said that in light of the travel advisory issued by the Foreign Office, it had decided to suspend service into and out of Israel.

During the 1991 Gulf War when Iraq fired 39 Scud missiles at Israel, all foreign carriers halted flights to Israel. Only national carrier El Al Israel Airlines continued to fly.

"The safety and security of British Airways' operation is always our absolue priority and British Airways would not consider operating any flights until we are satisfied totally that it is safe to do so," Spencer Hanlon, manager of British Airways Israel, said on Thursday.

British Airways, which operates two nonstop flights a day to and from Israel, was the third largest foreign carrier to Israel in 2002. In 2001 it was the leading foreign carrier in Israel.

Well ains , they will certainly find it difficult to arrive on time , or at any time when they are grounded, but I presume on this occasion Sadam will take the blame.

Times

March 20, 2003

BA set to reopen airline sale talks
By Russell Hotten



BRITISH AIRWAYS is expected to reopen talks with Germania about selling the domestic German airline its loss-making subsidiary, Deutsche BA (DBA).
BA has been left with the troubled DBA after easyJet on Tuesday abandoned proposals to buy the airline because of a deterioration in the German aviation market. Germania made a bid for DBA two years ago, but was rejected because BA regarded the undisclosed price as too small.

BA is keen to begin fresh talks with potential buyers amid signs that DBA will make a substantial loss this year. The carrier is also thought to have made preliminary approaches to Germanwings, a division of Lufthansa, and Hapag-Lloyd Express, part of TUI.

Martin Wyatt, chief executive of DBA, said yesterday the airline, which has not made a profit since 1992, would make a big loss this year.

That loss is on the back of the existing strategy, he said.

BA said on Tuesday that it had no plans to close DBA and would continue to develop it as a low-cost airline.

DBA is a largely domestic carrier, but one strategy being considered by BA is to grow the airlines number of international services.

Looks good if there is a consensus

ains



By Daisuke Wakabayashi and Emi Emoto


TOKYO (Reuters) - The International Air Transport Association, a trade body representing 96 percent of the world's airlines flying international routes, has decided to raise regular fares on international flights by three percent due to high fuel costs, industry sources have said.


The IATA's decision comes as the global airline industry braces for a war in Iraq, which could mean a cut in passenger numbers and rising costs for fuel and security.


The fare rise, expected to take effect on April 15, was agreed at a meeting of IATA members in Geneva earlier this week and the group plans to make an official announcement at a later date, the sources said.


It would be the first IATA fare rise decision since March 2001, they added.


No comment was available from the IATA.


Peter Morris, the chief economist of the IATA, told Reuters in February that high oil prices had raised the share of fuel in airlines' costs to 15 percent from 12 percent.


Morris also said that a war in Iraq could mean another year of losses for global airlines, already suffering from cumulative losses of $30 billion in 2001 and 2002.


The September 11 attacks forced airlines to incur almost $7 billion in additional costs for extra security and insurance. To offset some of those costs, the airline industry has laid off about 200,000 workers in the past year.


WAR PREPARATIONS


Bracing for war, airlines have started to reduce costs, lay off staff and cut earnings forecasts.


U.S. carrier Continental Airlines (NYSE: CAL - news) said on Wednesday it planned to cut $500 million in costs, including 1,200 job cuts by the end of the year, adding that a war might lead to more cost-cutting.


"If the anticipated war in Iraq is prolonged, or if other events further degrade revenue or increase costs, we will need to find additional savings or ways to generate more revenue in order to compete effectively," Continental Chief Executive Gordon Bethune said in a statement.


Australia's top carrier, Qantas Airways , said this week it planned to cut the equivalent of 1,000 jobs, or three percent of its workforce, to prepare for soft bookings. That announcement came one month after it axed 1,500 staff.


Asia's largest carrier, Japan Airlines System Corp , said earlier this month it would post an operating loss this year because of a slowdown in international flight reservations due to worries about a war in Iraq.


Jeff Young, head of Japan economic and market analysis at Nikko Salomon Smith Barney, said higher air prices would have a big impact on whether Japanese travellers went abroad.


"Japanese consumers do demonstrate quite a sensitivity to price," he said. "The stereotype is that they do not, but the data show they do and that element of price distinction is increasing the longer Japan's sluggish economy continues and the longer that wages fall."


Japanese airlines, including Japan Airlines System Corp and All Nippon Airways Co Ltd , plan to file for permission for the fare increase from the Transport Ministry.

Thursday, March 20, 2003 Posted: 0708 GMT ( 3:08 PM HKT)



Lufthansa expects passenger numbers to fall by 20 percent in the event of a war in Iraq

MUNICH, Germany (Reuters) -- Deutsche Lufthansa AG said on Wednesday its 2002 operating profits rose strongly, but the result implied a fourth quarter operating loss wider than most analysts had expected.

The airline said operating profit rose to 718 million euros ($762.8 million) last year from 28 million in 2001 when profits were hit by a downturn in passenger traffic resulting from the September 11 attacks, the sluggish economy and a series of pilot strikes.

Sales inched up to 17 billion euros in 2002 from 16.7 billion euros the year before.

Crash landing time , down we go.

holding their own in a very mixed and volatile market


ains




03/20 09:50
British Airways, European Carriers Cut Routes as War Erupts
By James Regan


London, March 20 (Bloomberg) -- British Airways Plc, Europe's biggest airline, Deutsche Lufthansa AG and other carriers cut flights and raised fares to counter an expected slump in air travel because of a war in Iraq.

British Airways suspended flights serving Tel Aviv and Kuwait. Lufthansa, Europe's third-biggest airline, canceled all flights from Frankfurt to the Middle East cities of Amman, Jordan; Beirut, Lebanon; Dammam, Saudi Arabia, and Kuwait as well as services from Frankfurt and Munich to Tel Aviv.

``It's critical now that airlines are actively managing costs,'' said Kenneth Tang, who helps manages about $2 billion at Credit Agricole Asset Management (Singapore) Ltd. ``Most airlines are cutting back frequencies to the Middle East, so the question is whether they can manage the spare capacity at this time.''

International traffic is expected to fall 10 percent because of the Iraqi war, the International Air Transport Association said yesterday. Continental Airlines Inc. plans to eliminate 1,200 jobs as Chief Executive Officer Gordon Bethune said losses in the airline industry may be as high as $13 billion.

U.S. forces attacked Iraq early today, 90 minutes after a deadline that U.S. President George W. Bush gave Iraqi leader Saddam Hussein to leave the country. Iraq fired two medium-range missiles into northern Kuwait, which Agence France-Presse reported weighed 3 metric tons and carried conventional warheads.

Lufthansa said 2003 earnings will decline with a drop in demand for air travel because of the Middle East conflict. ``An end is not yet in sight and it will be prolonged as a result of the Iraq conflict,'' said Chief Executive Officer Juergen Weber at a press conference.

Asian airlines also dropped flights and raised fares. Qantas Airways Ltd., Australia's largest carrier, said it will raise fares on overseas flights by 3 percent, and Japan Air said it's considering doing the same on the recommendation of an industry association. Singapore Airlines Ltd. plans to reduce flights to the Middle East, the U.S. and possibly Europe.

Korean Air Co. suspended two weekly flights to Cairo via Dubai. Qantas on Tuesday said it will force more workers to take vacation which it said was equivalent to cutting 1,000 jobs.

Falling Traffic

Air New Zealand Ltd. today said demand for flights to London, Japanese destinations, Hong Kong and Singapore has fallen by 10 percent. Australia-based Macquarie Airports said passenger-count growth at Sydney and Rome airports has slowed.

``Whenever we have a war or terrorist events, people do defer flying unless it is absolutely urgent,'' said Arthur Lim, head of investment at Macquarie New Zealand Ltd.

Other airlines are reporting declining traffic.

``Our passenger and cargo volume will be affected,'' said Stanley Hui, chief executive officer of Hong Kong Dragon Airlines Ltd.

Rival Cathay Pacific Airways Ltd., Asia's fifth-largest carrier, has also seen bookings fall, said Alan Wong, the airline's general manager of corporate communications.

Airlines are also rerouting flights to avoid Iraqi airspace.

The International Air Transport Association said airlines will fly either north or south of Iraq, said Anthony Concil, a spokesman. There are no plans to fly over Tibet yet.

Singapore Airlines said its flights to London and Frankfurt today will fly through Afghanistan, and then north of Turkey.

Airlines will raise full-fare and other type of tickets, which account for 10 percent of bookings, to ``compensate for substantially increased costs'' said Concil.

SriLankan Airlines, part-owned by Dubai-based Emirates, imposed a $5 surcharge on one-way tickets as of March 12 as fuel prices rose. The jet fuel price in Singapore increased 24 percent in the last year, trading at $32.55 a barrel yesterday.

Falling a little now ,down a tick,and sure to fall a pile when the B52`s I watched just an hour ago, on SKY take off for Iraq.
Lets hope that ains gets back from Belgravia before the ` planes are grounded.

Q

good news ...


20 Mar 2003 12:49 GMT

BA says expects year profit despite war

LONDON, March 20 (Reuters) - British Airways Plc, Europe's biggest airline, said on Thursday it was still on track to post a profit this financial year, despite war in Iraq.
In early February, Chairman Colin Marshall said at its third-quarter results: "In the absence of hostilities in the Middle East, we expect this financial year to be profitable."

The United States unleashed a war on Thursday to topple Iraqi leader Saddam Hussein, just 12 days before the end of BA's financial year to March 31, 2003.

BA told Reuters that Marshall had told a closed investment conference last week: "Despite so many negative factors, we still expect to record a profit for this full financial year."

"The position today remains unchanged," a BA spokeswoman said. Marshall told Reuters in New York earlier this month the full-service carrier was in "good shape" to survive any war.

Down a lot more now , target for the day a quid