BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh
BBCi CATEGORIES   TV   RADIO   COMMUNICATE   WHERE I LIVE   INDEX    SEARCH 

BBC NEWS
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 


Commonwealth Games 2002

BBC Sport

BBC Weather

SERVICES 
Monday, 5 November, 2001, 16:22 GMT
BA traffic falls by one-quarter
BA's share price, last five years
Europe's largest airline, British Airways, suffered a 25% fall in traffic in October, the company said.

Some analysts had expected the fall to be closer to 30%.

Ahead of the release of the traffic statistics, BA shares had fallen sharply, but the smaller than expected traffic fall lifted the stock back into the black.

The share slide during morning trade had prompted observers to predict that the airline might be relegated from the FTSE index of the UK's 100 leading shares.

Weak future

BA's share fell 9% in early trading on Monday after several major investment banks expressed concern about its performance.

Even BA itself appeared pessimistic about the immediate future, though bookings could pick up by the end of the year, the company said in its traffic statement.

"Forward bookings for November indicate a similar traffic decline to October, with the US, Middle East and Japan being the worst affected markets," BA said.

But "early indications for December suggest a slight improvement on November", the airline said.

The share price bounced back from Monday's early low of 133p to about 140p per share around lunchtime, about 5% below the opening price.

"At the current share price, BA could be out of the FTSE," said Barclays Stockbrokers transport analyst Anthony Cross.

But soon after, the stock rose to 149p by 1550 GMT, 1.5% above its opening price.

Less traffic

Mr Cross predicted that passenger numbers on trans-Atlantic flights would have stabilised after having fallen sharply since 11 September.

But traffic has deteriorated in Europe and other regions every single week since the attacks, he said.

BA will release its financial results for the first half of the fiscal year on Tuesday.

The figures will reveal the impact on BA's bottom line of the 11 September attacks and the subsequent war against terrorism.

Analysts predict more bad news from the airline.

Gloomy analysts

The initial fall in BA's share price came after Goldman Sachs described BA as a "market under performer" and said its shares are worth much less than the current market value.

Goldman predicted that BA would make pre-tax losses of 594m for the fiscal year ending on 31 March 2002.

Merrill Lynch raised its pre-tax loss forecast for the airline from 65m to 775m before exceptional items for the fiscal year.

Goldman Sachs valued the stock at between 55p and 128p.

Barclays Stockbrokers valued BA shares at around 100p.

See also:

09 Oct 01 | Business
British Airways to cut workers' pay
05 Nov 01 | Business
Emirates airline's $15bn plane order
05 Oct 01 | Business
More cutbacks at BA
05 Oct 01 | Business
Easyjet weathers storm
05 Nov 01 | Business
Ryanair profits soar
05 Oct 01 | Business
Sabena protected from creditors
27 Sep 01 | Northern Ireland
Jobs blow as BA axes London route
27 Sep 01 | Business
Airlines mull security costs
25 Sep 01 | Business
TBI ditched by French suitor
20 Sep 01 | UK
Anger over job cuts
09 Sep 01 | Business
British Airways confirms job cuts
04 Sep 01 | Business
British Airways cuts 1,800 jobs
18 Sep 01 | Business
UK airlines call for state aid
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories