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".

BA denies merger with KLM amid talks to sell Deutsche

ROB GRIFFIN scotsman


BRITISH Airways yesterday confirmed it was in talks over a possible sale of its German arm, but denied it has rekindled merger plans with rival KLM.

The airline is believed to be discussing the future of Deutsche BA with Germany holiday company Tui, after EasyJet dropped plans for a takeover last week.

A BA spokeswoman confirmed there was interest from other possible suitors but refused to name the companies involved. "We certainly have got other interested parties but any talks would be at an early stage," she said. "We are not prepared to speculate or name names."

But she dismissed as "rumour and speculation" reports that chief executive Rod Eddington was this week meeting his opposite number at KLM, Leo Van Wijk, in a bid to resurrect merger plans last discussed almost three years ago.

In a separate development, Virgin confirmed it is planning to launch a new low-cost airline in the United States - despite the financial crisis gripping the industry.

Sir Richard Branson is holding talks with a potential backers for the $15 million (9.6 million) project, which could launch by the end of next year.

Last night, a Virgin spokesman said: "We are investigating the possibilities as its always been our aim to have a low-cost airline in the United States.

"Many analysts believe at least one airline could go under this year which would create a unique opportunity for us. We have got the experience to go in and operate more efficiently than the others."

The news comes at a difficult time for airlines. Passenger numbers have been so badly hit since the terrorist attacks of 11 September that many major carriers have flown into severe financial crises.

Senior airline executives also fear a further downturn in response to the war in the Gulf, and may start cutting back on routes and staff numbers over the coming weeks.

BA, which is also considering putting staff on unpaid leave, is believed to have re-entered discussions with Tui after EasyJet backed away from a deal, citing the tough German market and local labour laws.

Last week, the airline insisted it had no plans to close Deutsche BA, despite the fact it hasnt made a profit since it was founded in 1992, although finding a buyer would be a welcome relief.

Some analysts also believe a tie-up between BA and KLM could be beneficial to both companies. Talks broke down in 2000 over a number of points, including a recent fall in the value of KLM shares, but both appear keen on consolidation.

KLM is believed to have held talks with Air France last year, while BA has bought a stake in the Spanish carrier Iberia.

But last night, a KLM spokesman moved to quash the speculation. Although he was unable to confirm a meeting between Mr Eddington and Mr van Wijk, he insisted: "I can assure you there are no merger plans at this stage."

03/24 00:12
BASF, British Air May Rise as Oil Dips: European Stocks Outlook
By Balduin Hesse


London, March 24 (Bloomberg) -- European stocks, as measured by the Dow Jones Stoxx 50 Index, have risen 21 percent during the past seven sessions. The price of Brent crude oil has tumbled 28 percent in the same period.

That's no coincidence, some investors said. Lower oil prices ease the burden of energy costs for the region's chemical makers, including BASF AG and Rhodia SA, and airlines, including British Airways Plc. They also may boost corporate earnings by removing a possible drag on consumer spending.

The combination might spur further gains by European stocks in coming days, they said. Crude oil fell for a seventh session on Friday as U.S.-led troops sent to battle in Iraq secured the country's two largest oil fields.

``I am buying shares every time the oil price falls,'' said Guy Monson, who manages the equivalent of $2.7 billion at Sarasin Investments. Oil's decline is ``a major stimulus on the economy and profits, and it will be a driver of business confidence.''

The Stoxx 50 surged 8.5 percent last week, while the Stoxx 600 Index climbed 7.8 percent. Both benchmark had their biggest weekly gains since September 2001, and extended rallies that started March 12 after they fell to six-year lows.

Germany's DAX Index soared 13 percent, the week's biggest gain among 76 global benchmark indexes tracked by Bloomberg. The U.K.'s FTSE 100 Index added 7.2 percent and France's CAC 40 Index climbed 5.5 percent.

20 Percent Gains

Brent crude, a benchmark for two-thirds of the world's oil, peaked near a 2 1/2-year high on March 12 amid concern that the war would disrupt supplies. Since then, Brent has tumbled more than 25 percent.

The Stoxx 600's chemical index surged 14 percent, the week's biggest gain among its 18 industry groups. BASF, Europe's largest chemical company, and Rhodia, France's largest maker of specialty chemicals, both climbed by about 20 percent. Only Bayer AG rose more; its shares jumped 36 percent as a Texas jury cleared the company in a lawsuit over the Baycol anti-cholesterol drug.

Chemical companies use oil as a raw material in the manufacturing of products such as plastics. BASF has closed plants and overhauled production to save money as oil prices climbed more than 50 percent during the past 12 months.

British Airways, Europe's largest airline, rose 18 percent last week. The gain contributed to a 12 percent increase in the Bloomberg Europe Airlines Index, consisting of eight carriers, which reached a two-month high.

Business Confidence

Deutsche Lufthansa AG, Europe's third-largest airline, climbed 13 percent even as it said this year's profit will fall because the war has reduced demand for air travel. Alitalia SpA, which reports earnings on Friday, rose 2 percent.

Fuel accounts for 12 percent to 15 percent of an airline's costs, according to an estimate by Aviation Economics, a London- based consulting firm.

Investors' focus on the war with Iraq may diminish the effect of business confidence surveys from Germany, Italy and France scheduled for next week.

Among executives in Germany, Europe's largest economy, confidence was little changed this month as they waited for a resolution of the conflict, according to economists surveyed by Bloomberg News. The Ifo economic research institute will release its survey on Wednesday.

Italy is scheduled to release business confidence figures on Tuesday. France will publish its indicator of business sentiment on Thursday. Confidence index for both countries will decline, according to the average estimates in Bloomberg News surveys.

`Good for Equities'

Otmar Issing, the chief economist at the European Central Bank, may provide some guidance of the region's economic outlook when he addresses the European Parliament on Monday. Last week, the central bank said it couldn't assess the effects of the conflict in Iraq on the economy.

``The prospects of an economic recovery are improving'' as crude oil prices decline, said Ruben Mikkers, who helps oversee the equivalent of $9.5 billion in European equities at Robeco Groep NV in Rotterdam, the Netherlands. ``It's good for equities in general.''

Munich Re, the world's largest reinsurance company, is among European companies reporting fourth-quarter earnings. The company will probably say Thursday that its loss widened to 1.7 billion euros ($1.8 billion) as it wrote down equity investments, based on the average estimate in a Bloomberg survey of nine analysts.

Shares of Munich Re, catering to insurance companies rather than consumers or businesses, have surged 27 percent since March 12 as stock-market rallies made those investments more valuable. Before then, the stock price fell to its lowest since April 1995.

Swiss Reinsurance Co., a rival, will give investors more details about its full-year results on Thursday. The company on Feb. 26 posted a loss of 100 million Swiss francs ($74 million).

Other companies reporting earnings during the week include Swisscom AG, Switzerland's biggest telephone company; Woolworths Group Plc, a U.K.-based discount retailer, and Metro AG, Europe's third-largest store operator.

Shares in Fiat SpA, Italy's biggest manufacturer, may rise as a result of the company's announcement on Saturday that it had agreed to sell its insurance unit, Toro Assicurazioni SpA, to the investment company Finanziera De Agostini for 2.4 billion euros, investors said. The sale will help pay for management plans to revive Fiat's unprofitable auto business.

Shares in Oxford GlycoSciences Plc, a U.K. biotechnology company that is selling itself, may rise on weekend news that Celltech Group Plc, the U.K.'s biggest biotechnology company, bought 10 percent of Oxford shares on Friday.

nice posts ainsey!

down 4% today ains, how much did you say you last bought at again?

50p target now seems reasonable.

hmmmmmmmmmmmm ........ looking to buy but doubt we will see 50p but who knows - I suggest you keep shorting until they do get to 50p :-))


ains

Flew back on Virgin from San Francisco on Sunday. Super service, their Clubhouse "Upper Class" lounge at San Francisco is absolutely the best I've ever been in. Fabulous service, amazing food in the lounge. Frequent flyer programme knocks the socks off BA's.

Virgin are going to launch a low cost airline in the US -- they've seen the gap opened up by the high-cost competitors who are bust (United/American).

I think the boy Branson may have got it right.

MM

you are wrong MM, ainsoph says BA is the best, he knows what he is talking about and always travels with BA (regularly).

F

Now this could have a very negative affect on long haul air travel.
Singapore quarantines hundreds of people due to the spread of the new respiratory disease SARL.

Lets hope you shorters can do better than last time ..... lots of news in the press this morning and I am waiting to buy (interestingly no one is saying peeps are going to stop travalling on holidays or business but there you go)



ains

BA anger over aid for US airlines
Brett Arends, Daily Mail 25 March 2003

AIRLINE shares led markets down worldwide on Monday as the war took a grimmer turn. Finnair announced 1,200 lay-offs, following other major airlines last week. TUI, Europe's largest travel agency, is targeting deep cost cuts. The war could cost airlines 6bn, the International Civil Aviation Organisation said.





US government plans to rescue its own carriers, with up to 560m in direct assistance plus loan guarantees, drew an angry response from BA. 'It's an absolute nonsense in a fully liberalised marketplace,' said the airline. 'We're not going to go with a begging bowl to our Government, and we don't think any cash should be handed out to failing carriers.'


Attention is turning to Iraq's postwar reconstruction, following Development Secretary Clare Short's Commons statement and the controversy over contracts going to American firms.


Ports group P&O apparently lost the bidding to an unnamed US firm to run the key strategic port at Umm Qasr.


Britain has earmarked 120m for aid. Unlike most other countries, it does not favour domestic firms in these contracts.


Experts believe Iraq may need 60bn of investment. Neil Partrick, of the Economist Intelligence Unit think-tank, warned that Iraq's oil revenues are unlikely to rise substantially above last year's 8bn until 2005. Contractors Balfour Beatty and Amec are considered well placed to win work rebuilding roads, bridges and pipelines. Balfour has operations in the Gulf and Turkey, plus a big US business and a relationship with the American military.



2003 Associated Newspapers Ltd.

Down again, this is the one to short, those who thought this war was going to be short were loonies.Despite what our dear ains says, I still see this dropping each day, until 60p is the bottom.

What exactly did I say for the record quidnunc? - you seem to have a habit of quoting things I do not actually say


ains

I must admit I prefer Virgin Atlantic and Singapore Airlines over BA anyday of the week.

These are certainly troubed times for the airline industry and I think that these scaling back of routes and increases in fares are just the tip of the iceberg.

With all this bad news and no one wanting to fly them .... I am wondering why you guys shorted at 90p and now they are still 114p after 130p ..... something wrong here :-))



ains

Sorry ains if I upset you, but didn`t you post this yesterday?, for the record, I would NEVER mis quote you ains , there is no need.The share has dropped to 113.75p,i.e. a fall of about 10% since your post below.You were asking what had happened to shorters of this stock, ainsoph, we are still here.
****************************************

- 21 Mar'03 - 12:44 - 200 of 224


Starting to wonder what happened to all the shorters on this stock :-)) - now up a third since they last came on here to crow about their shorts .... up nearly 5% intraday @ 122p and in the top ten risers



ains

Sorry I cannot understand just what you are trying to say ollie ..... suggest you have a think and come back with a clear cut post of what you are doing /saying ....

ains, I am saying this,

I have never mis-quoted you, for the record, you are long BAY, I am short, there does that clear the air?
I have asked a couple of the other members of the group to help you out a little in the campaign, you are obviously overworked, 24/7 a day will bring a nervous breakdown .

I am not long - I hold just my basic quarter unit ..... you really must get it right if you intend to keep 'quoting me'


Currently moving with the market



FRANKFURT (AFX) - Deutsche Lufthansa AG said it has reduced its planned intercontinental capacity this summer by seven aircraft.

The cuts are in response to the "sharp fall in passenger bookings, especially for routes to America and Asia," the carrier said.

The focus of the cuts is on Lufthansa's flights to North America, it said.

All its current destinations will continue to be served, it said.

Further measures on short and long haul flights will be decided on at short notice in response to developments in demand, it added.

You are NOT long or SHORT but holding a quarter unit, hhhhmmmmmm!
Oh well ains you obviously know what you are talking about.
More help needed here guys I think, ains did give some signs of cracking up on the TAD thread yesterday, come on Group help him out.