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".

LONDON, Feb 24 (Reuters) - British Airways BAY.L has cut services to the Gulf and is to lodge stop-over crews in Cyprus after a British worker was shot dead in Saudi Arabia and as war looms in Iraq, the carrier said on Monday.
Europe's largest airline said the decision to stop using Gulf hotels followed a change in security advice from the British Foreign Office.

"The planes will still go down to the Gulf but the crews won't stay in the hotels which we would normally use down in the Gulf region," a British Airways spokesman told Reuters. "They will spend their days of rest in Larnaca, Cyprus."

The carrier also said it was reducing the number of flights from London to Dubai to one a day from two and had suspended services to Muscat, Oman, from Abu Dhabi.

"It's all part of the safety and security of the operations," said the spokesman.

Last week, a gunman shot dead a British defence contractor working for BAE Systems in Saudi Arabia.

On Monday, the world united behind demands that Iraq begin destroying its longer-range missiles or face U.N. Security Council action that could finally trigger war.

British Airways is cutting 13,000 jobs and slashing capacity in response to a slump in demand for air travel caused by economic uncertainty and the September 11 plane attacks in the United States in 2001.

British Airways warned this month its return to profits would be under threat if war broke out.

February 25, 2003

EU seeks finish to 'national' airlines concept
By Russell Hotten



THE European Commission is to demand that member governments give up the idea of national airlines, marking another step towards allowing mergers between flag carriers.
Tomorrow the Commission is due to request that member governments drop the right to negotiate aviation deals with states outside the EU, and give airlines from other countries outside their own equal rights to fly from airports.

The move is part of the Commissions attempt to create a truly open market in European aviation, but which could still take several years to impose.

Last November the European Court of Justice gave a boost to the Commissions ambitions when it ruled that parts of the existing bilateral agreement with the United States broke European Union laws.

Airlines such as British Airways, Iberia or KLM are restricted from consolidation by national governments which have preserved national carriers as symbols of statehood.

The EU executive tomorrow will tell members that it is time to recognise airlines as community carriers, not national carriers.

The Commission claims that this would thereby unblock consolidation within the airline industry by removing existing provisions that discriminate on the basis of nationality.

The Commission says the current system of bilateral pacts is preventing the creation of a true single European aviation market and stopping much-needed consolidation.

The nationality clauses within aviation pacts complicated merger plans between British Airways and KLM in 1998. The talks were eventually aborted amid uncertainty over whether the new carrier could keep its flying rights in both countries.

Rod Eddington, BA chief executive, has said that consolidation among national airlines is essential, and he has recently hinted that he would like a deal with Iberia should regulations allow.

Meanwhile, easyJet, Europes biggest budget airline, confirmed yesterday that it wanted to acquire take-off and landing slots at Orly airport, in Paris, used by the collapsed Air Lib.

However, Ray Webster, easyJets chief executive, who was in Paris yesterday, said the acquisition of the slots could not be conditional on hiring part of Air Libs workforce.

EasyJet is drawing up plans to apply for about 20,000 slots at Orly.

02/25 08:25
EasyJet Lowered Fares 6% to Attract More Passengers (Update1)
By James Regan


London, Feb. 25 (Bloomberg) -- EasyJet Plc, Europe's largest low-cost airline, charged 6 percent lower fares in the four months through January and said first-half prices will drop in line with rival Ryanair Holdings Plc as it seeks to attract passengers.

``They are experiencing quite a bit of yield pressure here,'' said Morgan Stanley analyst Martin Borghetto, who rates the stock ``overweight.'' The comparison with Ryanair implies EasyJet's fares in the six months ended March 31 might be down as much as 10 percent from the previous year, he said.

Ryanair featured on todays Working Lunch after they cancelled 100000 trips ..... hmmmmmmm ..... interesting comparison made between them and BA in terms of service and what you get.

Pleased I fly BA and let them have the worries if something goes wrong .... end conclusion wws very much 'you get what you pay for'



ains

Credit where its due, ainsoph did buy some BAY at 95p, he posted it live then sold half of them for a good profit at a later time, he posted that too.

That is true :-)) ..... bought a few before close as a short term play @ 103p



ains

BBC - Buzz, the Stansted-based low-cost airline, is to cut 12 routes, reduce its fleet and make up to 400 workers redundant, its new owner has said.
Ryanair, which in January agreed to buy Buzz from Dutch carrier KLM, also confirmed that all Buzz flights would be grounded "for the month of April 2003, at least".

It said the restructuring plans would be presented to staff and creditors over the next few days after which a final decision would be taken on whether to restart some flights on 1 May.

Ryanair said Buzz's financial position was "extremely precarious", and that the airline was losing more than 1m euros (683,000) a week.

More soon.

Not helping


LONDON (AFX) - British Airways PLC has confirmed that it is considering the future of its Concorde fleet due to poor demand for the supersonic service.
"The retirement date of Concorde is under review, but no decision has been made at the moment as to when that will be," said a BA spokeswoman.

BA has struggled to attract Concorde customers since an Air France Concorde crashed in Paris killing 114 in 2000.

"In the current commercial environment where business and premium brands are under increased pressure it's only prudent for us to think carefully about when we should retire Concorde," said the spokeswoman.

She could not say when a decision would be made on the seven plane fleet, only five of which are in current service.

"There's a huge number of factors to consider," she added.

jdd/lam

26 Feb 2003 17:00 GMT

BA reviews Concorde's future in weak market

By Daniel Morrissey
LONDON, Feb 26 (Reuters) - The future of supersonic air travel between London and New York could be in doubt, with British Airways asking: Should Concorde be retired early?

The review by Europe's biggest airline comes at time when major airlines are under pressure from shrinking corporate travel budgets, depressing sales of business class tickets.

"We are looking at when Concorde should retire, although no decisions have been taken," said a British Airways spokesman. The carrier has five Concordes certified to fly until 2009.

Almost three years ago an Air France AIRF.PA Concorde crashed near Paris and killed 113 people, forcing both the British and French carriers to pay for costly modifications.

BNP Paribas analyst Nick van den Brul said it made sense for British Airways to retire Concorde early because the threat of impending war in Iraq was cutting business travel plans.

"The Concorde has never been that profitable anyway -- a marginal profit and it's just a flagship," said van den Brul. "It is quite true that all of the leading carriers are seeing the pre-war risk of substantial declines in business travel."

The Concorde has one daily London-to-New York flight.

"We will continue to fly it as long as it is safe, reliable and commercially viable," said the spokesman for British Airways. The airline has slashed thousands of jobs and reduced its capacity in response to the weak demand for air travel.

The king of the rich jetset for 30 years, Concorde has always been synonymous with superstars who quaff champagne and guzzle lobster while travelling at twice the speed of sound.

But the reality is much different.

Analysts estimate about 80 percent of Concorde's passengers were business travellers. Falling stock markets and a drought in merger and acquisition business has forced City of London and Wall Street banks to cut tens of thousands of jobs.

British Airways, which relies heavily on the transatlantic business travellers for high-margin revenues, warned this month it faced flat revenues in 2003 and a tougher year than 2002.

Well I gave up on BA (aka b*gger all) after a load of hassle and poor treatment after years of loyalty. I think they've lost it again.

I fly Virgin to the States all the time now. No airline is perfect, but they are not bad at all. And AmEx/Virgin will do you a deal on Upper Class fares. And the girls are charming.

GW

typical French ....


PARIS (Reuters) - An Air France supersonic Concorde airliner bound for New York has lost a piece of its rudder in flight, but still landed safely and on time at its destination, the airline says.
Air France said on Thursday a technical investigation was under way.

The incident comes a week after an Air France Concorde on the same route made an emergency landing in Canada after one of its engines malfunctioned.

Air France and British Airways -- the only airlines to operate the supersonic jets -- grounded their Concorde fleets after an Air France Concorde crashed on take-off from Paris on July 25, 2000, killing 113 people.

An investigation concluded a burst tyre had ruptured a fuel tank and flights resumed in November 2001 after modifications were made to avoid a repetition of the accident.

The Concorde entered service in 1976 and Air France and British Airways have 12 of the planes still flying in total.

To be fair to Air France, (although why I should escapes me) this fault has occurred at least twice that I can recall on BA Concordes.

More worrying is the cover up - it's hard to describe it as anything else - over the Air France Concorde crash.

It was blamed on debris on the runway from a departing Continental flight: to my knowledge, this played little or no part in the accident. A combination of other factors were responsible, including maintenance and technical crew error.

G

Looks like we will see them all grounded before much longer .....


ains


February 28, 2003

EasyJet 'reneged on deal with BA'
By Russell Hotten TIMES



A UNION representing pilots at Deutsche BA, the German subsidiary of British Airways, accused easyJet last night of reneging on an agreement to buy the operation.
The accusation will fuel suspicions that easyJet, Europes biggest budget airline, wants to walk away from a deal because of rising fears of a new recession in Germany.

It leaves BA in a difficult position because the airline has been desperate to sell its loss-making German division and may now be forced into a fire sale.

Georg Fongern, a spokesman for the Vereinigung Cockpit union, said pilots had verbally agreed to easyJets request for changes in working practices at Deutsche BA. Herr Fongern said: All of a sudden easyJet decided not to sign. They changed the terms of the agreement. It was not a surprise because we no longer think easyJet wants DBA.

EasyJet, which is paying BA 600,000 (410,000) a month to keep open an option to buy Deutsche BA, has not formally announced that the acquisition has been abandoned.

However, other sources who have spoken to easyJet executives say the company views a Deutsche BA acquisition as too risky given the worsening economic environment in Germany.

Ray Webster, chief executive of easyJet, has said that he wants to make a firm decision on Deutsche BA by the end of March, although the option to buy runs out in August.

No talks between easyJet, which has representatives on the Deutsche BA board, and the pilots union are planned. A spokesman for easyJet denied that a deal with the pilots had been agreed.

US landing fees set to soar JANES

We are hearing anecdotally that due to lower aircraft traffic volumes, some airports are actually considering increasing their landing fees and terminal rentals by as much as 30% to 40%," says Tom Browne, managing director, for the aviation infrastructure department at the Air Transport Association (ATA).

While only anecdotal evidence that is probably only applicable to a limited number of the hundreds of airports in the US, the fact that traffic is down and fee rises are under consideration still does not bode well for the industry.

With less aircraft in the air, airports still have to cover their fixed operating expenses incurred when running the terminal buildings, runways and related infrastructure. Added to this is the additional expense of improved security measures that the Transportation Security Administration (TSA) is responsible for in 450 of the nation's airports.

The problem with introducing the new TSA measures is that there is little, if any, funding available to pay for these new security systems and staff - despite its being a function of the federal government. Thankfully this may change.

But one problem that it may raise is what collateral can be used to borrow against for those airports that are already close to reaching their maximum debt level. Most of the improved security measures will be hi-tech equipment and employees as opposed to large brick and mortar infrastructure assets.

Agreeing the fee
Once airports have determined what to charge the airlines for landing fees over the course of the next six to 12 month period, the real negotiations begin. But the negotiating leverage of the airline will depend upon the airport that it uses.

An airline representing a significant portion of the flights using one airport terminal, with another hub nearby that is underused, will tend to have much more bargaining power than an airline that is one of many, using an airport with no nearby alternatives. And with time being of the essence, there is a mutual benefit for the two sides to ensure that all paths, however creative, are explored quickly.

There is still substantial excess capacity among the airlines with a significant proportion of the airline industry already in the midst of Chapter 11 proceedings. And with the looming threat of war with Iraq in the Middle East, another external shock is on the way that will further reduce air traffic levels.

It looks like any increase will just be passed onto the airlines that are likely to just add the landing fee increase to passengers' tickets.

Perhaps a more worrying issue for passengers is the proportion of a ticket that federal taxes and other fees already represent. According to ATA statistics, in 1972 it represented 7% of the ticket's total price. In 1992 more than double, at 15%. In 2002, a full 26% of the price. This is a significant portion of the ticket's cost.

It will be interesting to see what the airlines can get away with in this skittish period of air travel.

02/28 07:42
BAA Can Raise Airline Charges, U.K. Aviation Authority Says
By James Regan


London, Feb. 28 (Bloomberg) -- BAA Plc, the world's biggest airport operator, can raise airline fees by as much as two-thirds at its London airports to help fund an 11-year, 8.1 billion-pound ($13 billion) expansion, the U.K. Civil Aviation Authority said.

Heathrow airport charges would rise to 6.48 pounds per passenger in fiscal 2004 from 5.60 pounds in fiscal 2002, followed by an increase of retail price index plus 6.5 percent in each subsequent year. Gatwick fees would rise to 4.32 pounds in fiscal 2004 from 4.25 pounds in fiscal 2002, with London Stansted rising to 4.89 pounds from 4.39 pounds. Charges at both would rise in line with the retail price index in the following years.

``These price cap increases are necessary to enable BAA to deliver services to a growing market through a major investment program,'' the authority said in a Regulatory News Service statement.

Raising the amount BAA charges airlines for using its airports would help finance a 3.7 billion-pound fifth terminal at London Heathrow airport, which is due to open in 2008. BAA expects the number of passengers using its three London airports to increase 46 percent through 2013.

The new limits on BAA's airline fees will apply from April 1 for a five-year period.

An increase in charges at the UK's biggest airport, could push up air fares, industry figures have warned. BBC news

The Civil Aviation Authority (CAA) announced in Friday it was putting up landing charges at Heathrow airport in west London.

We will fight this proposal tooth and nail

Sir Richard Branson

The increase will result in airlines facing a 36% increase in charges over the next five years, but the CAA said its decision would not "materially affect air fares."

The news, however, was seen as another blow by the cash-strapped aviation industry, and Virgin Atlantic said it had "no choice but to pass these increases on in fares."

'Sheer madness'

Virgin chairman Sir Richard Branson said: "This is sheer madness.

"At a time when fuel prices are at $40 a barrel and when BAA is still making massive profits, whoever suggested that it be allowed to raise charges to airlines by 40% must be off their heads.

"It begs the question - who regulates the regulators? We will fight this proposal tooth and nail or we'd have no choice but to pass these increases on in fares."

British Airways echoed Sir Richard's comments.

"These increases are bad news for the travelling public and bad news for an industry already in financial distress," said a spokesman.

Charge effect

The effect of the changes will mean that take off and landing charges - which include parking - will rise from 6.13 to 6.48 in 2003 to 2004.

It will then increase on average by 43p each year over the next five years.

"These price cap increases are necessary to enable BAA to deliver services to a growing market through a major investment programme, its 7.4bn 10-year plan to boost long-term capacity at its London airports, which includes the fifth terminal at Heathrow," the CAA said in a statement.

Stansted and Gatwick airports are also affected by the increases.

The maximum allowed charge at Gatwick would be 4.32 per passenger in 2003/04 and then rise by RPI in each year thereafter, while Stansted would be 4.89 in 2003/04 and then increase by RPI over the remaining four years.

Investors seemed unpeturbed by the charges, with BAA shares up 5% to 432p in early trading.

BA launches fresh drive to save 450m costs
By Kevin Done, Aerospace Correspondent FT
Published: February 28 2003 20:13 | Last Updated: February 28 2003 20:13


British Airways is launching a fresh cost-cutting drive aimed at making savings of 450m ($708m) a year by March 2005, as the carrier struggles to improve its profitability in a weakening air travel market.


Much of the burden of the latest measures will be carried by the group's 16,000 suppliers worldwide, as BA seeks to cut external expenditure by 10 per cent.

The latest round of cuts is in addition to the current two year programme aimed at taking 650m out of the cost base by March 2004.

Rod Eddington, BA chief executive, said that "tough market conditions" meant that additional cost saving initiatives were needed over the next two years.

The continued threat of war, economic uncertainty and competitive pressures had stalled predicted growth in the airline industry. BA's revenues for the current financial year to the end of March would be 1.5bn less than two years ago.

"Our focus must be on managing what we can control, while preparing for the impact of war," said Mr Eddington.

The aviation industry is in the middle of its worst financial crisis with airlines in the US and transatlantic services, where BA is a leading player, hardest hit. Two of the top seven US airlines, United Airlines and US Airways, are already in court-administered bankruptcy and there are growing concerns about the financial prospects of American Airlines, the world's largest carrier.

BA is expected to report a pre-tax profit for the current year to the end of March, as it recovers from a 200m loss a year ago, its worst result for 20 years. But the group has repeatedly warned that the improvement can only be based on cost-cutting rather than on increasing revenues.

The airline said on Friday that it was aiming to cut its annual 3bn external expenditure, excluding fuel, by 10 per cent, or 300m, by March 2005 with a further 150m to be cut from internal costs.

No further job cuts are envisaged in the latest cost reduction programme, but the group is already in the middle of eliminating 13,000 jobs between August 2001 and March next year.

It said it was planning for no rise in the workforce, while increasing the flying programme or capacity by 5 per cent year-on-year in 2003/04 and by a further 1 per cent in the year to March 2005.

Part of the cost-cutting is supposed to come from a move to "a more self-service culture" through a programme called "Customer Enabled BA".

The targets include a move to 100 per cent use of eTickets - replacing paper tickets - by December 2004, 80 per cent of customer transactions available online by March 2004, and a further simplification of the fare structure with a 50 per cent reduction in fare types and 50 per cent self-service check-in by March 2005.

BA is also aiming to streamline its internal processes with a target of achieving 80 per cent of employee administration online with no duplicated paper processes.

LONDON, March 1 (Reuters) - British Airways Plc, Europe's biggest airline, said on Saturday it will slash costs by an extra 450 million pounds ($711 million) a year by March 2005 in a weak aviation market that has "become even more challenging."
The fresh two-year cost-cutting drive comes on top of an existing programme that is on track to deliver annual savings of 650 million pounds by March 2004 by chopping 13,000 jobs, reducing capacity and closing loss-making European routes.

"This business plan builds on the achievements of the future size and shape programme, while acknowledging that the changing environment has become even more challenging, and it targets 450 million pounds of additional cost savings by March 2005," a spokeswoman for British Airways told Reuters.

The big airlines in Europe and the United States have been reeling from the slump in demand for air travel, particularly lucrative business travel as companies reduced travel budgets.

The September 11 aircraft attacks on the United States in 2001 accelerated the airline industry downturn that began as economic growth slowed. The slump has hit British Airways particularly hard on its important North American routes.

The deep cost cutting at the debt-laden British Airways helped it post a third-quarter profit last month, but it also warned of flat revenues in 2003 and a tougher year than 2002.

It had debt of 5.2 billion pounds at December 31.

Shares in British Airways closed at 104-1/4 pence on Friday. The stock has underperformed the benchmark FTSE 100 Index .FTSE by about 18 percent over the past six months.

The spokeswoman said the new savings would mainly come from a 10 percent reduction in external costs, excluding fuel, migrating 80 percent of all customer services to the Internet and making electronic tickets available to all customers.

No more reductions in staff were planned, she said.

press coverage on the proposed cuts continues ....



BA banks on self-service to help cut further 450m
By Adam Jay (Filed: 03/03/2003) Telegraph


British Airways has unveiled its business plan for the next two years, in which it will aim to make 450m of savings.

The cuts come on top of the two-year "Future Size and Shape" programme, which runs until March 2004, and intends to save 650m and cut 13,000 jobs. The new plans include a 10pc reduction in spending, and a move towards a "self-service culture" for both passengers and staff.

Chief executive Rod Eddington told BA's staff newspaper: "With Future Size and Shape we embarked on a two-year journey to transform our business into a leaner, fitter, simpler and more competitive airline.

"One year on, we are on track to deliver, but tough market conditions mean new, additional cost-saving initiatives are also needed over the next two years."

Mr Eddington said that the group had considered postponing its latest plan while war in Iraq was looming. "We decided we cannot put our business on hold. Our focus must be on managing what we can control while preparing for the impact of war."

BA's focus on self service will lead to targets such as 80pc of customer transactions and 100pc of executive club transactions being available online by March 2004. It will also aim for a 50pc reduction in fare types and 50pc self-service check-in by March 2005.

The airline says it has no plans to increase job cuts beyond the 13,000 envisioned under Future Size. About 9,200 jobs have been lost since August 2001, while an extra 800 will follow this month.

sky news


Passengers flying to and from UK airports faced the worst delays in Europe last year, according to the latest figures.


Planes using UK airspace in 2002 accounted for 37% of European flight delays - the largest share in Europe, and up from the share total of 14% in 2001.

Italy was the only other country that had an increase in delays of more than 1% between 2001 and 2002.

The figures were compiled by Eurocontrol which supervises aircraft movements between 24 countries.

Heathrow airport had the largest rise in delays last year and also the largest rise in the number of flights delayed by 60 minutes or more.

Together with Amsterdam and Paris, Heathrow also had the the largest amount of delays on departing traffic.

Dublin, Edinburgh, Manchester and Glasgow also suffered above-average delays.

Overall, the average delay per flight for planes in UK airspace was three minutes, while only four other countries had an average delay of more than one minute.

Compared with 2001, the UK was the only country to have had an increase in delays of more than one minute, whereas it fell by more than a minute in six countries.