British Airways up on further job cuts and launch of premium service
Shares in British Airways (BA) gained 0.4% yesterday, as investors digest vast amounts of activity including further job cuts, the launch of a new premium service and a bid for Lufthansa's stake in bmi.
BA confirmed it plans to further reduce employee numbers, after already cutting 2,500 jobs this year. Further talks with the carrier's unions are to be held this week.
BA CEO, Willie Walsh, stated "I'm not one to call green shoots when I don't see them and I'm not seeing them. What I can say is things aren't getting any worse but I see little evidence at this point of things getting better…People working in the business understand the challenges facing the industry. We've reduced the number of people working but our operational performance is the best we've ever seen."
BA confirmed the launch of all Business-class A318 London City-New York service yesterday. Despite a decline in premium traffic, Mr Walsh forecasts the service is likely to be profitable in the first year of operation. However, Mr Walsh added BA is yet to see signs of a general recovery in Business travel.
Two UK carriers confirm interest in bmi
Meanwhile, Mr Willie Walsh confirmed BA has expressed interest in purchasing Lufthansa's stake in bmi, to increase its slots at its base at London Heathrow Airport. bmi is currently the second largest carrier at the airport after BA. Mr Walsh also stated negotiations for a merger with Iberia are continuing, while Chairman, Martin Broughton, stated he expects to know by the end of Oct-2009 whether the deal will be finalised.
UK based Flybe's CCO, Mike Rutter, also confirmed the carrier has approached Lufthansa about acquiring parts of bmi, specifically bmi's regional operations and domestic operations out of London Heathrow, with Mr Rutter describing Flybe as an "acquisitive airline". He added that parts of bmi could be a "potential fit" with Flybe's existing operations.
Shares in Lufthansa dipped 0.5% yesterday.
Elsewhere SAS jumped (+2.2%), Austrian gained (+1.4%), Finnair rose (+0.5%), Air France-KLM lost (-1.6%) and Aer Lingus dropped (-3.3%).
Europe selected airlines daily share price movements (% change): 29-Sep-09
