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".

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.

MUSCAT (AFX) - British Airways PLC said it will resume flights from London to Oman on March 30 after a five-week suspension due to travel warnings to UK nationals.
"The new schedule will allow BA to maintain a smooth operation in the region, with all services continuing via Larnaca (in Cyprus)," BA's country manager in Oman, Sunita Gomes, told Agence France-Presse.

The revised schedule will see a twice-weekly service from Muscat to London, Gomes said.

Elsewhere in the Gulf, BA will operate three flights a week to Abu Dhabi, 11 to Dubai, three to Doha, four to Jeddah and three to Riyadh.

Dedicated flights from Abu Dhabi, Bahrain, Doha, Dubai and Kuwait will be operating directly via Larnaca to London Heathrow, Gomes added.

BA announced the temporary suspension of its Muscat flights on Feb 24, saying it was making "adjustments in its schedule for the whole of the Gulf region" following changes in travel advice from the Foreign Office to British nationals travelling to Bahrain, Jordan, Qatar and Saudi Arabia.

Tuesday March 4, 11:28 PM





British Airways backs profit target

NEW YORK (Reuters) - The chairman of British Airways (LSE: BAY.L - news - msgs) has reaffirmed the airline's profit forecast for the current year, assuming no war, and backed its view of flat revenue for the year beginning in ADVERTISEMENT

April.


In an interview with Reuters, he also said Europe's largest airline expects no further job cuts in addition to the 13,000 cuts already disclosed.


"On any competitive basis, we're certainly in good shape to come through any war. We certainly believe that our survivability is very high indeed," said the chairman, Colin Marshall.


He spoke in an interview after dedicating a renovated British Airways Terminal 7 at John F. Kennedy International Airport in New York.


BA last month posted a small third quarter profit, but warned revenue will likely not rise in 2003. The September 11 attacks hit BA hard by damping travel on its key North American routes and it has cut ticket prices in the face of pressure from low-cost airlines such as EasyJet Plc (LSE: EZJ.L - news) and Ryanair (Dublin: RYA.I - news) .


Saturday, BA said it will slash costs an extra 450 million pounds a year by March 2005, on top of an existing program to deliver annual savings of 650 million pounds by March 2004, including 13,000 job cuts.

very narrow trading range today around a - 4 million traded




03/05 13:07
British Airways, Rivals' Ratings May Be Cut, S&P Says (Update1)
By James Regan


London, March 5 (Bloomberg) -- British Airways Plc, Deutsche Lufthansa AG and rival European airlines' credit ratings may be cut as air travel slumps, and will be reviewed if there is an outbreak of war in Iraq, Standard & Poor's said.

Traffic will probably increase by less than 5 percent this year at Western European carriers, S&P said. Full-service airlines will probably have less than 3 percent traffic growth and may post no increase, the rating service said.

``So far in 2003, traffic and yield levels have been lower than previously expected, due to weak economic conditions and fears of a military conflict, and the outbreak of a war in Iraq would make matters even worse,'' said Virginie Casin, a director of S&P's Corporate Ratings Europe, in a report.

Full-service airlines have grounded planes, scrapped routes and cut jobs as they try to lower costs amid a decline in air travel. British Airways and KLM Royal Dutch Airlines NV have said they may idle more aircraft in the event of Iraq conflict after Lufthansa said it will ground 46 planes.

Average fares will ``remain weak'' this year because of a drop in premium traffic as corporate travel budgets are crimped amid an economic slowdown, S&P said. Customers who have switched to cheaper seats are ``unlikely to revert to their previous traveling patterns in the near future.''

``Carriers' ratings would likely come under renewed pressure if low fares were to be aggravated by an increase in the proportion of empty aircraft seats,'' S&P said.

Filling Fewer Seats

KLM said today it filled 2.2 percent fewer available seats in February as fare cuts failed to attract enough new passengers to take up extra capacity. Europe's No. 4 carrier is forecasting a second consecutive fiscal-year loss in the 12 months ending in March.

In the event of an international armed conflict, ``the risk of strained cash flow generation and of prolonged overcapacity is likely to have more serious rating implications than a continued softening in demand,'' S&P said. European airline credit ratings will be revised with ``negative implications'' should war break out in Iraq, Casin said.

Some unrated Europe airlines with low or negative cash flow or which face refinancing deadlines will probably fail or need outside financial aid ``should a marked decline in traffic levels occur,'' Casin said.

``Investors should also note the risk of critical credit deterioration for airlines based in southeast Europe -- Turkey, Greece, Italy, for example -- if hostilities break out in Iraq,'' she said.

MOSCOW (AFX) - British Airways PLC is to operate out of Moscow's Domodyedovo airport from July 1, transferring from Sheremetyevo airport where its flights have operated previously for the past 45 years, regional manager Daniel Burkard said.
The decision to leave Sheremetyevo "was taken to improve the service to passengers," Burkard told a press conference, explaining that Domodyedovo, southeast of Moscow, would provide better infrastructure and transfer services and easy access.

The airport is linked to the city by an electric train, unlike Sheremetyevo, northwest of Moscow, access to which is provided by bus, taxi or private car.

"Domodyedovo international airport has the biggest and fastest growth in the Russian Federation," Burkard noted.

lg/bb/wf/cmr

No-one seems to have mentioned the fact that BA will drop out of the FTSE100 based on next Tuesday's market caps unless there is a strong rally between now and then.

Its current average position is below 110th, which is not good. Surely that will hurt the share-price?

James (Shares)

We talked about that a couple of weeks ago .... it has been well signalled and don't see any real ST effect .... often helps - as other funds come in.

The war situation is a far more sensitive situation



ains

Overall load factor flat for Feb - see ann

05 Mar 2003 15:03 GMT

UPDATE 1-BA February traffic falls in tough market

(Adds details, share price, background)
LONDON, March 5 (Reuters) - British Airways Plc, Europe's largest airline, said on Wednesday its February passenger traffic fell 5.6 percent from a year earlier and its markets remained challenging "as the threat of war and terrorism grows".

BA, which has slashed jobs and cut capacity in response to weak demand on transatlantic routes and competition from Europe's low-cost airlines, said its passenger seat load factor dropped 1.6 percentage points to 70 percent versus last year.

BA said snow and ice at London's Heathrow airport, snow storms in the United States and security alerts at Heathrow and Gatwick airports contributed to the weaker February traffic.

Shares in BA were down 2.7 percent at 98 pence by 1501 GMT.

Chairman Colin Marshall told Reuters in New York on Tuesday the carrier was comfortable with its profit forecast for this financial year so long as war was avoided in Iraq. Marshall said in the interview BA was keeping its flat revenue outlook and was in "good shape" to come through any war.

BA said on Saturday it will slash costs by an extra 450 million pounds ($711 million) a year by March 2005 on top of an existing cost-cutting drive designed to extract annual savings of 650 million pounds by March 2004 by chopping 13,000 jobs.

BA said the decline in February passenger traffic, measured in revenue passenger kilometres, comprised of a 14.3 percent reduction in premium traffic -- first class and business class passengers -- and a 5.6 percent drop in non-premium traffic.

It cut capacity by 3.5 percent.

The airline said passenger traffic on its lucrative Americas routes was down 4.1 percent in February and the biggest fall was on Asia-Pacific routes, down 22 percent.

surely BAY will fall out of the FTSE 100 next week as the share price is sub 100p..

yes they probably will .....

5 March 2003, This Is Money

RITISH Airways shares dived near to their all-time lows today after the flag carrier confirmed the muchfeared collapse in business traffic.




It said the number of passengers flying in premium-class seats in February was down 14.3%, contributing to an overall year-on-year fall of 5.6%. That compares with an already poor February 2002 figure when BA was plunging into losses after 9/11.



The monthly statistics show BA's aircraft are flying less full, down to a load factor of 70% despite cuts in the number of services. The news sent the shares off 3 1/2p to 98p, just above their October all-time low. Worst-hit was the Asia-Pacific market, down 22% year on year.


'The economic and political environment is challenging as the threat of war and terrorism grows,' said the airline.

'A number of operational issues have impacted the month including snow and ice at Heathrow and major snowstorms at many of our US east coast gateways, and security alerts at Heathrow and Gatwick,it added.


The news came as BA's credit rating came under renewed pressure from rating agency Standard & Poor's, which issued a bearish note on the western European airline industry, warning carriers face debt quality downgrades even if there is no war in Iraq.


Even including the large growth at the low-cost airlines, S&P reckons that passenger growth across Europe will only be 5% while the largest players, BA and Lufthansa, are likely to go into decline.

'Economic and competitive pressures mean average fares will remain weak in 2003, reflecting the unfavourable cabin mix and sustained price competition,' said the agency.


'Ratings would likely come under renewed pressure if low fares were to be aggravated by an increase in the proportion of empty aircraft seats.


'Worsening economic conditions have led to a tightening of corporate and leisure budgets. Given the bleak outlook for 2003, passengers who have shifted from premium to economy are unlikely to revert to their previous travelling patterns in the near future.'


2003 Associated Newspapers Ltd.

Fly the Flag? The only one left in the bag is the white one. BA has no medium term future due to it's appalling judgement in recent years. It's carriers like BA that held back the earlier development of air travel to the levels we are now seeing. I hold BAA shares because passengers willl continue to grow strongly in the years ahead.

Credible carriers will come through probably on a take over basis to free up the wasted slots used by BA. It's a tradegy for passengers that they have continued to trade for so long.

I fear that the following missive that I received by email from the BA Executive Club (of which I was a Silver Tier member for 15 years hence received lounge access and occasional upgrades) indicates further distancing of the company from its loyal business customer base. My "life" membership, granted in april last year, was terminated at two weeks' notice in September. All company travel has been moved elsewhere as a result.

Check out the paragraph about Executive Club Corporate Card Agreements below. Another bunch of business travellers will now vote with their feet, just as I did.

It's truly tragic.

MM
PS: Note that they didn't even spellcheck this: "Exective" in the first line.


The British Airways Exective Club is changing on 1st July 2003.

Based on customer feedback, we are simplifying the programme and introducing some new benefits for members.

****Get more from your BA Miles****

Use your BA Miles to upgrade a ticket to the next cabin^ with Miles for Upgrade

Combine cash with your BA Miles to redeem sooner with Part Cash Part Miles

Fewer BA Miles required for flights within the UK and to some European cities

You will also continue to earn bonus BA Miles when travelling Concorde, FIRST, Club World, Club Europe, or World Traveller Plus. However, the bonus levels will be reduced to allow for the other changes being made to BA Miles

*****Simplified Tier Points****

- You will earn Tier Points on more economy fares
- Extra Tier Points can be earned on flights within the UK and on some European routes
- The entry and renewal levels for Silver members will be aligned at 600 Tier Points. We have lowered the Silver entry threshold from 700 to 600 Tier Points

As part of these changes, Executive Club Corporate Card Agreements (ECCCAs) will be withdrawn on 1 July 2003. However, your membership of the Executive Club will continue.

****All these changes will be effective from 1 July 2003****

We hope you will be able to enjoy the new benefits.

For full details of these changes and the new Terms and Conditions, please visit http://www.ba.com/executiveclubchanges

Yours sincerely,

Sharon Callagahan
Manager, Executive Club

A dog is for life, but BA Executive membership is not.

Haystack:

Very drole. I have a fund of other anecdotal evidence, mainly from flight crew, which indicates that all is not well in British Scareways, despite the unlamented departure of Bob Ayling.

Flight crew have always despised anyone that can't actually fly a plane or understand a bit about Bernoulli or know what a SID or STAR is (Standard Instrument Departure and Standard Terminal Arrival Route). This is normal in aviation. But this has gone beyond the usual fun and games: many flight crew regard things like the locked cockpit doors post 9/11 as a real indication that the CAA and airline management "don't get it".

It has to be said that the airline business is a terrible place to be right now, but it is equally clear that the BA marketing department should be first up against the wall when the revolution comes, despite those hugely expensive ads (or because of them??).

MM

as someone tracking and waiting to buy a few - this is all good stuff. Nonsense mostly but there you go

Durlatcher continues to rate them as a trading short but note caution is creeeping in.

Personally - I much prefer to travel in style and safety and more than happy to entrust myself and my family to their care next week



ains

This seems to be fairly typical of the days early press coverage


TIMES


March 06, 2003

Slump puts BA at risk of ejection from FTSE
By Russell Hotten



BRITISH AIRWAYS suffered a 14 per cent slump in premium first and business class passengers in February, sparking a 5 per cent fall in the share price. The steep share price slide fuelled fears that the airline could again be ejected from the FTSE 100 index next week.

The airline blamed bad weather in the United States and security scares at airports for an overall 5.6 per cent drop in traffic last month. But it was the fall in high-spending premium business that worried investors.

Yesterdays traffic figures were accompanied by another warning from BA that the threats of war in Iraq and of terrorism were having a serious impact on trading. Last week the company said it would be stripping out a further 450 million in costs during the next two years.

BA said its load factor a key measure of the number of seats filled fell by 1.6 per cent to 70 per cent in February year on year.

The shares fell 5p to 96p, which will put the companys place in the FTSE 100 in jeopardy when the index is reconfigured on Tuesday.

KLM, the Dutch airline, underlined the problems facing national carriers yesterday when it gave warning of deeper cuts to summer services and use of more smaller planes.

fairly flat at this time with heeavy volume


BA makes maiden SMS flight

London, March 6 2003, (netimperative)



by Chris Lake

British Airways is launching its first SMS campaign this week in tandem with the weekend's Six Nations Rugby Championships.


The airline operator is an official travel partner for the Rugby World Cup 2003 and is giving fans the chance to win tickets, flights and accommodation for the event to be held in Australia this October. It has picked SMS agency Flytxt to run the campaign.

Promotional staff will distribute leaflets at Six Nations rugby matches throughout March asking fans to send a text message to BA to enter the competition.

Entrants will then receive a message asking them to register on the ba.com website to offically enter the draw. They will also receive a monthly newsletter and email offers, as well as access to BA's online services.

The move follows a one-day trial BA promotion managed by Flytxt prior to Christmas, in support of the airline's 'Escape' gift vouchers.