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".

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.

I wouldn't be at all surprised to see BAY taken over, ainsoph, did you pick up a few at 95p like last time?

I have a few more than yesterday but still only about half a unit ..... looking to add a few more asap. They were quite strong today - kept bouncing back



ains

06 Mar 2003 18:41 GMT

Airline body says new Heathrow charges unacceptable

GENEVA, March 6 (Reuters) - The head of the global airlines body IATA on Thursday denounced planned new charges to carriers at London's Heathrow airport as unacceptable and said they undercut industry recovery at a time of crisis.
The official, Giovanni Bisignani, made his comments in a formal statement on a decision last month by Britain's aviation regulator to approve hikes at Heathrow amounting to 36 percent in landing and takeoff fees over the next five years.

"The proposed increases are excessive and unacceptable to the airlines," he declared.

"Air transport is going through one of the worst crises in its 100-year history and the proposed increases are counter- productive to the efforts the airlines are making towards stabilisation and recovery."

The some 280 members of IATA, the International Air Transport Association, suffered cumulative losses of some $30 billion in 2001 and 2002, according to the body's chief economist Peter Morris.

He told Reuters in Tokyo on February 28 that tentative hopes for a small profit this year were based on a scenario of no war in Iraq. It there were a conflict, he said, "all bets are off."

The Heathrow increases are aimed at covering costs of future infrastructure investment by airport owner BAA Plc BAA.L at the world's busiest hub. They have been fiercely criticised by British airlines.

Bisignani said airports were abusing a "low-risk, monopoly position" to make hefty profits while airlines were struggling. IATA recently crossed swords with Zurich's Unique Airport over charges aimed at covering costs of a new terminal docking area.

Airlines say such cost increases mean they will have to charge passengers more.

But the British regulator, the Civil Aviation Authority, said it did not expect its decision would have much effect on fares because airport charges were only a relatively small percentage of airline costs.

ainsoph:

You said:

"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"


Nonsense? maybe, but I speak as I find. I believe that BA have made a number of serious blunders in customer relations recently. I, like you, have been a long term fan. But I was so taken aback by their recent behaviour towards me that I actually bothered to put finger to keyboard and wrote to Eddington. I never do things like that, can't be bothered normally. Where before I found the company respinsive, I got the cold shoulder. OK, maybe it's me. But very bad practice on their part.

Style and safety? Don't worry about safety if you fly with a major carrier. Style? BA took that away some time ago. All my last journeys between London and Silicon Valley (SFO) have been with Virgin Atlantic and I'm a convert. They are still trying hard to please. So many of the BA staff seem to have had the stuffing knocked out of them by the Company.

BA could easily win me back, but I don't think they'll bother to try.

Honestly, I think they may be doomed to decline and takeover.

MM

People have been talking about them being doomed for as long as I can remember .... but they are still here and still the worlds largest airline. I appreciate that they don't hold a monopoly and some will find favour with other airlines ..... this is the way with any free market and we all have our own ideas about value - comfort - safety.

I have said - I like their service and want to fly in a secure ambiance - I currrently hold a half unit in shares and will add a few but that doesn't mean I have to use their product ..... but I do .... based on price - convenience - service - safety and in these troubled times all are important to me .... I will be using them 4 times in the next week or so and will soon moan if they don't live up to the expected standards.



ains

03/07 14:57
British Airways's Eddington Says Ticket Prices May Rise on War
By James Regan


London, March 7 (Bloomberg) -- Rod Eddington, chief executive of British Airways Plc, Europe's biggest airline, said rising oil prices, increased airport landing charges and the threat of higher air passenger duty may force it to raise ticket prices.

The need to preserve cash amid concern a possible war in the Middle East will cause a further decline in air travel means the carrier ``cannot afford to absorb any one of these increases,'' Eddington said in the airline's employee newspaper.

``They will have to be passed on to our passengers, which will negate much of the work we have done in making our fares both competitive and excellent value for money,'' he said.

British Airways said last month that 2003 will be ``tougher'' than 2002 as premium traffic continues to slump and a possible war in Iraq threatens to hurt air travel and raise the cost of fuel. It said last week it plans to cut an extra 450 million pounds ($724 million) of costs by March 2005 on top of 650 million pounds already targeted by March 2004.

British Airways has increased ticket prices as much as 10 pounds after the cost of fuel rose to $373 a metric ton from $249 a metric ton six months ago, the chief executive said.

``Our aviation fuel bill will almost certainly continue to rise unless war is averted with Iraq, the world's sixth biggest exporter of oil,'' Eddington said. Jet fuel accounted for 11 percent of British Airways's operating costs in the first half of fiscal 2003.

The airline will save 63 million pounds in its first-quarter of fiscal 2004, which ends June 30, after it fixed 50 percent of its fuel costs for the period in advance, he said.

Averting War

``We have prepared as best we can,'' Eddington said. ``Everybody in this industry is hoping that a conflict with Iraq can still be averted. The current uncertainty is extremely damaging to our business.''

The U.K. Civil Aviation Authority last month told world No. 1 airport operator BAA Plc it can raise fees per passenger for carriers at its London Heathrow airport to 6.48 pounds a passenger in fiscal 2004, followed by an increase of 6.5 percent above inflation in the four subsequent years. Heathrow is British Airways's base and Europe's busiest airport.

The price increase, which will begin on April 1, may lead to 50 percent higher charges in the next five years, according to Eddington.

In addition, the U.K. government may decide to raise air passenger duty to pay for the ``environmental costs of aviation,'' Eddington said.

``We do not subscribe to that view and prefer to look at other alternatives such as emissions trading,'' he said.