Recent problems with the new T5 Terminal at Heathrow have resulted in more problems for BA when will they recover their No1 position.

the strike will be but a short term nuisance even if it goes ahead.
technically more important would be if the pension fund blocked the merger deal, but there is no chance they will do it - it would be turkeys voting for christmas

with luck, the ballot will recommend strike action which should result in sp being whacked, and at that point i'll probably buy again

Just closed half my short @209 for +16.

quite right too, as i think it was pretty dangerous position ...... if sp comes back to 200 or a bit lower, i shall probably buy back in

CORRECT:Virgin:Requiring BA To Give Up Heathrow Slots Not Enough





("Virgin Atlantic: BA's Surrender Of Heathrow Slots Not Enough," published at 1237 GMT, incorrectly suggested that BA had offered to surrender takeoff and landing slots at London's Heathrow Airport. The correct version follows:)

LONDON -(Dow Jones)- Virgin Atlantic Wednesday called on the European Commission and U.S. Department of Transportation to reject British Airways PLC's (BAY.LN) planned transatlantic alliance with AMR Corp.'s (AMR) American Airlines, saying any calls for BA to surrender slots at London's Heathrow Airport won't be enough to guarantee competition.

British Airways and American Airlines last year applied for antitrust immunity that would allow the two carriers to work more closely on scheduling and setting fares.

"Slot remedies alone could not reinstate an effective level of competition nor address the substantial negative effects which would arise from the proposed alliance," long-haul carrier Virgin Atlantic said in a submission opposing the immunity application. Requiring BA to relinquish takeoff and land slots is a measure that the commission could seek.

"We urge the European Commission to recognize that even extensive slot remedies on their own would not make this a suitable case for an individual exemption," it added.

I've just closed the rest of my "dangerous position" @205 +20 lol.

well done son!

Christmas strikes loom as BA hits new union turbulence

Two years after airline boss Willie Walsh agreed a deal with unions, winter disruption looks ever more likely.

This is a bit long, but well worth a read for investing in BAY med term:
Tim Marshall at Redburn, research note:

There is a clear road map for BA. We expect approval of anti-trust immunity with American Airlines and Iberia to be taken well, for investors to become more comfortable with Iberia merger synergies and for underlying improvement in fundamentals to lead to revenue recovery.

British Airways is seeing signs of improving trends in two key areas: premium traffic and the north Atlantic. The discipline of the US airlines on the Atlantic should continue with the schedules showing capacity down 14% in Q409. We assume the recovery in corporate travel spending continues into next year and against easy comparisons, revenues will look good. We forecast an operating profit in FY11.
Anti-trust immunity (ATI) would allow BA to co-ordinate transatlantic schedules and pricing with American Airlines and Iberia. Air France-KLM believes its ATI with Delta enhances revenue by 5%, so with 5bn in combined revenue with American Airlines alone, this could add 150m in revenue, or 47p per share, to BA. This implies no slots are divested, so we assume the value uplift is a more conservative 30p per share.

Our analysis of BA back to 1974 shows its ability to reach a 10% margin after each sharp downturn. Cost cutting has been key but this management is tackling some of the more fundamental barriers to a higher profitability. Our 250p price target assumes an underlying value for BA of 180p to which we have added 40p from Iberia and 30p from ATI with American Airlines. The underlying business trades on 13x our FY12 EPS estimate.

The bull case for British Airways is straightforward:

Costs: British Airways has shown itself very capable of cutting costs in the past, particularly through the Future Size and Shape programme post 9/11. This year, the initial target of 220m in non-fuel cost savings was surpassed at the H1 results with 275m savings already made. This is before further staff cost savings the company hopes will come from cabin crew and the other groups following the new terms and conditions in effect from November this year.

Revenue: we are currently at a low ebb in the cycle, which should be followed by increasing yields over the coming quarters. The aftermath of 9/11 and the Gulf War at the start of the century was followed by strong revenue growth, particularly driven by a strong UK economy and growth on the Transatlantic.
Merger with Iberia: the merger with Iberia was eventually agreed in November. The initial announcement suggested up to 400m in annual synergies, a third coming from revenue and the remainder from cost savings. Assuming a rather conservative 5x multiple on these synergies adds 40p+ in value to British Airways fair value.

Anti-trust immunity with American Airlines: the application to discuss pricing and scheduling of Transatlantic business is awaiting clearance by the various regulatory bodies. Attempts in 1998 and 2002 failed as the airlines were asked to give up slots at Heathrow deemed to be more valuable than the benefits from ATI. However, since then, Open Skies has opened access to Heathrow and offered hope that ATI will be allowed, as the SkyTeam and STAR Alliance members have. Combined BA/AA Transatlantic revenue is around 5bn. Assuming synergies are similar to the 5% of revenue AFKL suggested for its ATI with Delta, then BA could yield a 150m profit uplift; using the same multiple as Iberia, this would add another 47p in value to the shares.
Even without Iberia and ATI, history suggests BA can return to the 10% operating margin often visited but rarely surpassed. We think BA standalone could reach 10bn in revenue within five years. A 10% margin would yield 1bn in operating profit, c40p EPS. At 10x P/E (the markets preferred valuation method when earnings are positive) and adding the Iberia/ATI value results in a 510p or 150% upside.

sounds like more "pie in the sky"

Possibly. I can't temper it with a 'bear' note, as I haven't found one yet, so only one side of the story being aired.

Well I've taken another "dangerous" short this morning :-))

Closed +7

British Airways Agrees Pension Scheme Deficits With Trustees





LONDON -(Dow Jones)- British Airways PLC (BAY.LN), the U.K. airline, said Monday it has reached provisional agreement on the actuarial basis to calculate pension deficits with the Airways Pension Scheme, or APS, and the New Airways Pension Scheme, or NAPS, and on the basis of this agreement, the deficit in APS would be GBP1.0 billion and the deficit in NAPS would be GBP2.7 billion as at March 31, 2009.

MAIN FACTS:

-Airline and trustees will work together to develop a recovery plan, a process which will involve the company consulting with employees and their trade unions.

-Regulatory deadline for the valuation process, including agreement on future contributions required and the recovery plan, is June 30, 2010.

-Both the valuation and the recovery plan are subject to review and approval by the Pensions Regulator.

-Regulator's provisional view is that the technical provisions may be materially below a level it feels appropriate.

-British Airways has asked Roger Maynard to step down as the chairman of trustees of the boards of APS and NAPS to focus on his Iberia role.

-A replacement will be appointed shortly.

BA faces increase on 3.7bn pension deficit

British Airways (BA), which will today learn if cabin crew will strike over Christmas, may be forced to fund a larger pension deficit than the 3.7 billion shortfall it revealed this morning in a development which could scupper its merger with Spain's Iberia.

The airline detailed a 3.7 billion deficit, comprising a 1 billion and 2.7 billion shortfall in its two main pension schemes, which is an increase from the 2.1 billion deficit revealed in the airline's last review of its retirement funds and more than the value of the entire company which has a market capitalisation of 2.3 billion.

British Airways Cabin Crew Vote To Strike - Union


LONDON -(Dow Jones)- British Airways PLC's (BAY.LN) cabin crew Monday voted to strike, unions said, threatening disruption for travelers over the Christmas holiday period.

The carrier and the unions have agreed to continue negotiations.

-By Jonathan Buck, Dow Jones Newswires; +44 (0)207 842 9237; jonathan.buck@dowjones.com

UPDATE: British Airways Cabin Crew Vote To Strike





(Adds detail and comment.)

By Kaveri Niththyananthan

Of DOW JONES NEWSWIRES

LONDON -(Dow Jones)- British Airways PLC's (BAY.LN) cabin crew Monday voted to strike over the busy Christmas period, threatening massive disruption for hundreds of thousands of passengers.

A 12-day strike is due to begin Dec. 22, trade union Unite said, after 92.5% of workers who voted in a ballot supported industrial action. The union said it remained open to negotiations, but only if BA reverses changes to working practices that it already has imposed.

It said it didn't rule out further action.

British Airways in a statement said it was extremely disappointed by the decision, which it said shows a lack of concern for its customers, its business and other employees.

"A 12-day strike would be completely unjustified and a huge over-reaction to the modest changes we have announced for cabin crew which are intended to help us recover from record financial losses," it said.

If a strike goes ahead, it will be the first BA has had since Chief Executive Willie Walsh took charge in May 2005.

The carrier and unions have clashed over BA's plans to restructure and adjust working practices in an effort to return the company to profitability after posting a GBP292 million loss for the six months to Sept. 30.

Strikes are dangerous for airlines because not only are disruptions expensive but they can put off passengers from flying with strike-hit carriers again.

Airlines globally have been badly hit by the economic downturn as passengers traded down to cheaper economy tickets or refrained from travel altogether. Most airlines have swung to a loss this year, while others have gone out of business. The International Air Transport Association forecasts the industry will make an $11 billion loss this year.

BA in particular has been hard hit because of its dependence on lucrative premium traffic across the Atlantic, which has fallen in the wake of the financial crisis and economic downturn. Analysts expect BA to make a GBP800 million pretax loss for the fiscal year ending March 2010, compared with a loss of GBP401 million in the previous fiscal year.

After making no progress on talks that dragged on for nine months, BA introduced cabin crew changes Nov. 16 at London's Heathrow Airport--reducing onboard personnel to 14 from 15--after the U.K. High Court dismissed an injunction application by unions. Instead, the two sides agreed to meet in court Feb. 1 to decide whether the changes are contractual or not.

BA insists changes allow the airline to accept more than 1,000 voluntary redundancies among cabin crew and allow 3,000 to shift to part-time work. BA employs 13,500 cabin crew, of whom 11,500 work at Heathrow. Approximately 9,000 work on long-haul routes. It aims to shed 4,900 positions during the fiscal year ending March 31, of which 3,700 will be in the U.K. BA employs about 38,700 workers.

"This is a double disaster for British Airways," said Bob Atkinson, travel expert from travelsupermarket.com. "Its customers are now going to be significantly affected and the airline will take a financial hit from the action."

At 1527 GMT, BA's shares traded down a penny, or 0.5%, at 200 pence, while the benchmark FTSE 100 index traded up 1%.

Where is the bottom for the sp?

Well I'm short again!

skinny what is your target sp?

180 would be nice, but the chart is a bit accademic with the strike looming.