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".

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.

yes have shorted these well up on these i can see 80p poss on if it breaks the 1 mark

BA considers bid for Virgin Atlantic
By Edward Simpkins and Mary Fagan (Filed: 25/05/2003)


Rod Eddington, the chief executive of British Airways, has called a meeting this week of senior executives to consider a bid for Virgin Atlantic, the airline headed by Richard Branson.

Executives at BA say that any deal is likely to be some weeks away, but that the industry is ripe for consolidation and that BA's reduced debt, which now stands at 5bn, puts it in pole position to acquire weaker rivals.

Roger Maynard, BA's head of alliances and franchises who is also responsible for strategy, has been recalled from a trip to Australia to attend the meeting, after it emerged last week that Virgin has been in merger talks with BMI, the Midlands-based European carrier.

"Maynard and Eddington are going to sit down to decide what this means for BA," a BA official said last night. "BA is always in the business for slots at Heathrow, and of the two carriers Virgin Atlantic is the much more attractive for us."

However, any deal between BA and Virgin would be sure to run into regulatory difficulties, both from domestic and European competition authorities and from US regulators.

It has emerged that in January this year Virgin, in co-operation with Texas Pacific Group, the US private equity firm, looked at whether it should bid for British Airways.

However, Virgin, which was advised by Credit Suisse First Boston, decided that it would prefer to look at some form of co-operation or merger with BMI.

Will Whitehorn, a spokesman for Virgin Atlantic, said: "We came very close. We were very serious about BA, but we decided with our advisers that BMI was more interesting. We have no for sale sign up, we have an expansion sign up."

ainsoph

One for you, check my notepad thread, you will be pleased of the news on there.

IT

ains has been banned

Back in May this year the price was at or below 100p - been doing well
recently despite retiring Concorde, recent passenger figures not bad,
good times coming back for BAY? Looks promising....
Now all we need is the dividend re-instated please!