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 got three business seats on Virgin for 50% each of the BA price, we share holders have been asking for such discounts for years from these arrogant management louts, and still no agreement, all the staff get nice perks from our investment though.I feelanother snotty letter coming on.

shag
Of course you did, living in your dream world again, you sad sad boy, get a life.
Guru

GURU
are you completely so devoid of anything to say that you have to post this pathetic imbecilic stuff, do you realise what a complete and utter oaf you make yourself look; by stating that I have not the means to buy three flights on an airline, does it make you feel better to think that?
I tell you, if you, and the other five- de-filtered tonight by the way to see you in action-I need a laugh-are not one person you certainly deserve each other, you could get psychoanalysed together at a cut rate.
Tell me , as the obviously stupid person you are, what on earth makes you think in such a disjointed futile way, is it a family sickness , or are you self taught?
Read your post again and blush.

ps , the "get a life " is a dead give away, I expect you say 24/7, babe, and go to karaoke with super-odd at Butlins

ROTFLMAO

Williams de Broe has buy ratings for British Airways (BAY)

Flying high right now @ 140p and set to go higher

H2 on the 19th


ains




LONDON (AFX) - British Airways PLC's overnight flight to Nairobi is operating as scheduled but all other flights to and from Kenya have been cancelled until further notice, a BA spokesman in Nairobi said.
"The move follows instructions from the British government Department of Transport that all registered airlines that fly to Kenya are to supsend flights with effect from 10.00 pm due to heightened security concerns in the region," he said.

Kenya Airways spokeswoman Grace Njau told Agence France-Presse the airline had "not received any advisory" from the British government.

"Flights are scheduled as normal and the last flight will leave at 11.40 pm for London," she said.

The Association of British Travel Agents earlier said Britain is suspending all flights to and from Kenya from today because of an "imminent" terror threat.

LONDON (AFX) - British Airways PLC is likely to withdraw from the consortium that owns Eurostar after National Express announced on Wednesday it was pulling its investment, the Financial Times reported, citing the company.
The paper quoted BA as saying, "In the light of the announcement by National Express, British Airways is certainly considering our position regarding Eurostar and are in discussions with the other shareholders."

Apart from the poor financial performance by Eurostar, which is thought to be losing some 100 mln stg a year, the withdrawals are being prompted by a restructuring of the company that operates passenger services through the Channel tunnel.

Eurostar comprises three separate companies, running the UK, French and Belgian parts of the network. National Express owns 40 pct of Eurostar UK, with French and Belgian state rail companies SNCF and SNCB owning 25 pct each and British Airways has 10 pct.

But Eurostar is working towards streamlining the three companies into a single entity before the end of the year, a plan code-named Project Jupiter. tf/rn

BA profits nosedive amid 'perfect storm'

Shocking last quarter loss of 250m takes shine off full-year return to the black

Nick Mathiason
Sunday May 18, 2003
The Observer

British Airways, Europe's biggest airline, will reveal a dramatic fall in final-quarter profits as the full effect of the Iraq war takes the shine off

its resurgent full-year financial performance.
Tomorrow BA, led by Australian Rod Eddington, is expected to report pre-tax losses of 250 million in the three months to 31 March - compared with 85m profit the previous year.

This shocking figure does not include any effect from the Sars virus outbreak in South-east Asia, which has decimated business travel.

Analysts say the Iraq war, the Sars outbreak and the reluctance of North Americans to cross the Atlantic will inevitably mean BA enters the first quarter of its new financial year in the red.

'We are in the midst of the perfect airline storm,' said JP Morgan's aviation analyst, Chris Avery. 'It was a pretty devastating last quarter.'

But BA is expected to report full year pre-tax profits of just above 66m - against a 200m loss for the previous year, which was the worst result since the firm was privatised nearly 20 years ago.

BA's performance is markedly stronger than its European rivals, which the company attributes to its moves to cut 10,000 jobs, reduce capacity, simplify its fleet and adopt the online ticketing tactics used by its low-cost rivals.

Overall, BA is on track to make savings of 450m and will reaffirm its commitment to its 'future size and shape strategy', aiming to rationalise the company in a harsher business climate.

But the airline will also confirm a 1 billion pension shortfall. BA will not comment on whether this will require additional funding until an actuarial review is completed in the autumn. Analysts say BA may have to find an extra 100m to make good the shortfall.

Earlier this month Britain's biggest budget airline, EasyJet, revealed that it had slumped 48m into the red during the six months to March, sparking concern in the City that the spectacular success of low-cost carriers could yet prove shortlived.

There are also concerns about a glut of new no-frills competitors who have started flying over the last 18 months.

Key government proposals to build more airport runways must be abandoned, a think-tank will say this week.

In its report on the future of aviation, the Institute of Public Policy Research will slam the Government for being 'in hock' to the airline industry, and will advise that existing capacity at airports be utilised more efficiently before expansion is considered.

The IPPR demands that the aviation industry's contribution to climate change through harmful fuel emis sions and land-hungry development be recognised. At present airlines pay no tax on fuel or VAT on tickets.

Later this year the Government will announce whether new runways are needed at Heathrow, Gatwick and Stansted. The British Airports Authority and airlines are lobbying strongly for them to be built.

But opponents say predictions for airline growth are wildly over-optimistic, and new runways will cause untold environmental problems

Aggressive job cuts put BA in line for return to profit

GUY DIXON Scot on Sunday


INVESTORS should get a strong indication about the real health of the economy as some of the UKs best-known firms report figures this week.

Blue chips BT, Marks & Spencer and Scottish & Southern Energy will all get their chance to update investors on progress, but it is British Airways that will set the ball rolling tomorrow.

The company has had a rough ride in the last year. This time last year it posted pre-tax losses of 200m for the 12 months to March 31, as competition from low-cost rivals and the fall-out from September 11 took their toll.

The flag carrier has since been battered by a new round of well-publicised difficulties in the airline sector in the run-up to war in Iraq and, more recently, Sars. And its falling share price saw it relegated from the FTSE 100 Index twice in the last year.

But BA has been aggressive, tackling costs by cutting capacity as the war loomed and bringing forward its on-going programme of job cuts, with the remaining 3,000 from a 13,000-strong cull now going by the end of September rather than March 2004. Analysts profits forecasts ahead of its full-year results on Monday vary widely from 56m to 225m.

High-street store Marks & Spencer will not see the benefits of the Easter retail boost when it issues profits for the year to the end of March on Tuesday because of the timing of the holiday.

But guidance throughout has been clear. At the time of its fourth-quarter trading statement, the company said that full-year profits would come in at the top end of analysts expectations - which ranged from 710m and 720m, adjusting for the 10m one-off cost of moving its head office to Londons Paddington Basin.

Analysts are not expecting many surprises on Wednesday when National Grid Transco issues full-year results.

In its most recent trading update, the group said profits would be impacted to the tune of 30m by its decision to suspend recognition of pension surplus credits. Analysts at stockbroker Gerrard expect pre-tax profits to come in at 1.23bn, compared to 797m last year.

Telecoms giant BT may have changed its logo, but continuity rather than drama is expected when it releases final results on Thursday. With no exposure to the mobile market, profits growth is not expected to be overly dramatic and investors will be looking at other indicators, such as margin improvements.

Nevertheless, Gerrard hopes for pre-tax profits of 1.86bn - last year bottom-line profits were 1.46bn.

Perhaps of more interest will be its pension fund. Although the recent rise in the stock markets will have taken some of the bad taste off any pension deficit, the well-publicised effects of the bear market on pension funds in general has highlighted the need for companies to change their weighting to depend less heavily on equities.

Interim results from InterContinental Hotels on Thursday will reflect the downturn in the industry caused by the lead up to war and the outbreak of Sars.

Covering the period from October to March, they are also likely to show that operating profits are even more depressed than under the ownership of SixContinents, the leisure group from which it demerged just weeks ago.

Analysts at Gerrard are forecasting interim profits of 80m for this first-results statement from the company.

May 18, 2003

BA faces a 1bn pension fund hole
Dominic OConnell S TIMES



BRITISH AIRWAYS will tomorrow reveal that the deficit in its main pension fund has trebled to nearly 1 billion two-thirds of the airlines market value because of falling equity markets and the increased cost of pension provision.
Pensions experts believe the airline may be forced to make extra contributions of about 50m a year to the fund from January.

The pensions chasm will cap gloomy results from BA. The airline is expected to report a small pre-tax profit around 40m for the year ended March 31, but Rod Eddington, the chief executive, is not expected to issue any guidance for this financial year. Analysts had expected him to follow the lead of Air France, KLM and Lufthansa and give outline guidance.

The impact of the Iraq war, the Sars virus, terrorism fears and the economic downturn have forced BA to cut weak routes and slash fares.

Most analysts expect the company to make a small operating profit in this financial year, but to fall into the red at the pre-tax level.

Eddington is understood to be weighing further cuts to regional operations and to its network from Gat- wick, which continues to lose money.

Several other British companies are expected to reveal hefty pension deficits this week.

The biggest hole revealed by the FRS17 test is likely to be at BT, the telecoms group that publishes full-year results on Thursday.

Some forecasts put the deficit as high as 7.5 billion, compared with BTs 16.5 billion market value. BT is expected to say that it does not anticipate having to increase its annual contributions to the fund.

Royal Mail is expected to reveal a pension deficit of nearly 4 billion.

BA has two pension funds, Airways Pension Scheme (Aps) and New Airways Pension Scheme (Naps).

The combined deficit at the last annual results was 319m. Aps is understood to be roughly at break-even, but Naps heavily in deficit. Naps was closed to new members on March 31.

A full actuarial valuation of BAs pension will be undertaken by the end of the year. The company will then have to decide whether it needs to increase its contributions.

Its a big deficit, but they can spread the load over a number of years, and in the meantime there is the likelihood of a recovery in equities. I think the additional contributions could be in the order of 50m to 80m a year, said one leading airline analyst.

Should be an interesting situation and one will need to see how real life compares with the forecasts .... I have a limited position at this time and will be prepared to jump either way ...



ains

BA flies back into the black
Robert Lea, Evening Standard
19 May 2003

RITISH AIRWAYS made a 135m pre-tax profit last year, but warned of a gaping 1.2bn hole in its massive pension fund.

In what chief executive Rod Eddington called 'one of the toughest years in living memory', job cuts of up to 13,000 staff and investment cutbacks saw BA soar back into the black in the year to the end of March, having dived to a 200m loss in the previous 12 months.



But the airline implicitly warned it may not be out of the worst by failing to reward shareholders - who have seen the stock plummet and fall out of the benchmark FTSE 100 index - with a dividend*. BA has now not paid a divi for two years, having axed it in the wake of the 9.11 terrorist attacks.



More explicitly, chairman Lord Marshall warned: 'Forecasting revenue against a backdrop of continuing global economic weakness, Sars and Middle East developments is very difficult. However the outlook is that revenue in quarter one [April-June] will be lower than last year. Visibility beyond the first quarter is not clear.'



The airline also revealed the funding shortfall in its retirement scheme has almost quadrupled in the year, reflecting the poor performance of the funds' investments during falling stock markets. BA's two major schemes provide for 101,000 employees, 44,000 of whom still work for the airline.



The annual results include an 84m

Down nearly 6% on the lack of forward visibility that the media is focussing on .... volumes are high against the daily average of around 8 million but not exceptionally so under the circumstances @ 3 million.



ains

LONDON (AFX) - Rod Eddington, chief executive of British Airways PLC, said he is confident the flag carrier can exceed its target of 650 mln stg of annualised costs savings by March 31, 2004.
"I'm confident we'll exceed the 650 mln stg," he told reporters after BA released its year to March 31, 2003 results.

"Our first challenge is to get to 650 mln stg and we'll focus on moving beyond it when we reach it," he said.

Earlier BA revealed it had achieved annualised cost savings under its 'Future Size and Shape' (FSAS) restructuring programme of 570 mln stg by March 31, 2003 -- ahead of its year one target of 450 mln stg.

The airline exceeded savings targets in all areas including manpower costs, distribution, procurement and information technology.

Manpower reductions since August 2001 total 10,182 against an FSAS year one target of 10,000, and are on track to achieve the FSAS year two target of 13,000 by September this year.

In addition to the FSAS programme, BA plans to cut costs by a further 450 mln stg by March 2005 -- 300 mln stg by reducing external spend by 10 pct and 150 mln stg from other initiatives.

BA reported a year to March 31, 2003 pretax profit of 135 mln stg versus a loss of 200 mln stg last time and ahead of analysts' expectations of a pretax profit of 17-108 mln stg.

The full year outcome masked a difficult fourth quarter, during which BA notched-up a pretax loss of 200 mln stg versus an 85 mln stg loss the last time.

However, the fourth quarter performance was still better than analysts' expectations of a pretax loss of 318-227 mln stg.

BA said it expected the business environment to remain challenging in 2003/04, given the backdrop of continuing global economic weakness, SARS, and Middle East developments.

It warned that revenue in quarter one will be lower than last year and said visibility beyond the first quarter is unclear.

"We've said that we anticipate it (first quarter revenue) will be lower. We're not going to put a number on that," Eddington told reporters.

"It's really difficult to get visibility looking ahead. Not just six months ahead but one month ahead, and in that environment we don't want to be putting any percentages on our broad comment of lower revenue."

At 8.47 am shares in BA were down 1-3/4 pence at 141-1/2.

james.davey@afxnews.com

Durlatcher takes an each trading stance this morning - looking for 148p on good newsfor move northwards but indicates a sell if closing below 136p


ains

LONDON (AFX) - Rod Eddington, chief executive of British Airways PLC, today insisted the flag carrier will not reverse its decision to retire Concorde despite Sir Richard Branson's campaign to save the supersonic airliner.
Last month BA and Air France announced they will ground their Concorde fleets in October and May respectively, prompting Branson's rescue attempt.

BA said its decision had been made for commercial reasons with passenger revenue falling against a backdrop of rising maintenance costs for the aircraft.

It explained that extensive talks with Concorde's manufacturer Airbus -- the European planemaker owned by European Aeronautic Defence and Space Co and BAE Systems PLC -- had confirmed the need for an enhanced maintenance programme in the coming years that BA could not justify.

"BA has been working with Airbus and its predecessors (Aerospatiale and British Aircraft Corporation) on Concorde for over 30 years and clearly the decision to retire Concorde was one that was only taken after a substantial amount of work was done between the technical teams at BA and Airbus," Eddington told reporters today after BA released its year to March 31 2003 results.

"The chief executive of Airbus and his senior directors have made it very clear to me personally that Concorde's time has come sadly and it's time she retired.

"Our experts and their experts have both come to the same conclusion it couldn't be clearer."

However, Branson looks set to continue the fight.

A spokeswoman for Branson's Virgin Atlantic said he will meet Airbus executives on Wednesday to put forward his case for saving Concorde.

Although his pleas to both Prime Minister Tony Blair and Trade and Industry Secretary Patricia Hewitt to intervene have been unsuccessful, he claims to have the backing of the British public.

Meanwhile, Eddington revealed that Concorde bookings have been "very good" since her impending retirement was announced April 10.

"A lot of people have had it as something they might want to do at some point in the future and they recognise they do have six months to do it," he said.

james.davey@afxnews.com

Will be looking for an entry point to add a few but media is tending to be neggative at this time

ains



Despite a previous tough 12 months and the 'triple whammy' of the war in Iraq, Sars and a weaker global economy, the 1.5 billion airline (BAY) reported a pre-tax profit of 135 million for the year to March, ahead of its 200 million loss the year before.

Turnover fell 8% to 7.7 billion, reflecting the withdrawal from unprofitable routes and 570 million of cost cutting, which is running ahead of forecasts. Revenue passenger kilometres (RPKs) fell 6%.

Operating cashflow rose by more than a third to 1.2 billion, while net debts were reduced by 1.1 billion to 5.1 billion. There is no dividend.

However, the rosier picture for the full year masks a tougher fourth quarter, which included the worst side effects of the war in Iraq.

The fourth quarter pre-tax loss was 200 million, compared with an 85m million loss a year ago, and a 7% fall in RPKs. Turnover fell 14.2% to 1.6 billion.

'It felt inside the business as though we were at war already, before 20 March,' said Eddington. 'A lot of premium business fell away and fuel prices rose.

'There are many pressures in the marketplace and the revenue environment is challenging.'

Certainly, the many pressures on the airline industry these days have hit some parts of BA hard, particularly its all-important premium traffic, which fell by a quarter in March and April.

Non-premium traffic, in contrast, appears to have recovered somewhat, although Eddington claims Sars is 'still an issue', as are the latest terrorist attacks.

Revenue for the first quarter of the current year will be lower than last year, he said, while there is little visibility beyond that.

Meanwhile, the group is to take an 84 million write-down and impairment charge on Concorde, which is to be grounded at the end of October.

BA's shares are down 5.25p at 138p.

Citywire Verdict:

A 30% reduction in the fleet and more than 10,000 redundancies so far have helped steady BA in the seemingly-endless turbulence in which the airline industry is flying these days.

And as Eddington predicts, further redundancies and the offer of unpaid leave for all staff mean the group looks on course to beat its previous cost-cutting targets of 650 million by March 2004, with an additional 450 million to come by March 2005.

BA's shares have nose-dived from nearly 250p a year ago to as little as 85p two months ago, to reflect the well-known woes of the airline industry. However, the rally in global stockmarkets has seen the shares almost double from their March low.

BA has been doing the right things and will emerge from its cost-cutting drive a leaner, meaner, flying machine. But its shares are not cheap and, given the continued wariness of air travellers, are risky even for the long term.

2003 Citywire

Telegraph tips them for adventureous investors


Rod's cost cuts helping BA climb into brighter skies

Since Rod Eddington took the controls at British Airways in May 2000, he's had foot and mouth, September 11, a nosediving economy, the Iraq war and now Sars to contend with. He's had rotten luck, but has made the best of it, pushing through changes at BA that were long overdue.



By September, 13,000 jobs will have gone without a fight with the unions. Engineering, catering and airport costs keep coming down and the short-haul European network is being reorganised, with losses more than halved last year to 117m. Mr Eddington is confident of cutting more than the target 650m of annual costs by next March.

There's much more focus on cash too. Net debt is still too high at 5.15 billion, but BA did well to cut it by 1.15 billion last year. Capex has also rattled down, from 906m to 319m last year. In short, BA is in much better financial shape should Mr Eddington's luck ever change, even if fuel and pension costs are rising.

The airline still looks too much like an option on the US economy, dependent on the resumption of its highly profitable bankers' shuttle across the Atlantic. Yet, with each percentage point on fares per seat translating into about 60m profit, the slightest upturn will give BA a massive lift.

There's no sign of it yet and BA is not helped by the billion-dollar bungs that the Bush administration is giving to US airlines, which Mr Eddington is rightly cross about. But one day it will come. Merrill Lynch, joint house broker, expects 43m profit this year, rising to 215m next, though it is more bullish than some analysts. With the shares down 5.75 yesterday to 137.5p, that equates to a multiple of 39 times, falling to 10 times.

Forecasting is notoriously difficult and, with no dividend, the shares are very risky. Still, BA is a highly cyclical stock and could reward a small punt.

Citigroup's Smith Barney retained its 'outperform, speculative' rating on BA and 170 pence target price. "As expected, the outlook is poor for the entire industry, but BA's aggressive cost cutting ranks it ahead of competitors," the broker said in a note to clients. "We continue to believe that BA is the best play among the flag carriers on a return to more normal political, economic and medical (SARS) conditions."

Merrill Lynch repeated its 'buy' stance. In a note to clients the broker said the results are more likely to provide encouragement for the short-term bulls than the bears. It said anticipated downgrades (versus pre-war estimates) for the full year may be less than feared, pointing out the results contain no new layer of bad news.

Meanwhile, Cazenove and Williams de Broe also repeated 'buy' recommendations.

Weird but CSFB have raised their target from 60p to 100p (currently 127) with EBIT raised from 121 to 170 million but they remain at underperform .... hmmmmm



ains

Here comes the 100p again.