British Airways owner International Consolidated Airlines Group was one of the day's biggest fallers in a market that slumped dramatically after a new front opened in the eurozone crisis.
The airline lost 9.2p to 162.6p on concerns about some of the businesses it acquired with its acquisition of bmi from Lufthansa. It was originally set to pay £172.5m but received a discount as it also took on bmi's loss-making low-cost and regional businesses after Lufthansa failed to sell them separately.
Willie Walsh, the airline's chief executive, said it was in talks with potential buyers of the businesses, but he was not confident of a sale. Analysts at Deutsche Bank said they would have preferred it if the low cost carrier - bmi baby - and the regional business had been sold by Lufthansa as they would now take up BA management time. Deutsche's Geof Collyer said:
Nevertheless we believe the deal price reduction will cover financial costs of shut-down (redundancy payments, existing contract renegotiation and passenger compensation.)
IAG expects this to be completed by the year end and in our view it is crucial these businesses are wound down quickly so as to minimise drag to BA.
British Airways owner IAG drops on bmi concerns, while FTSE slumps on renewed eurozone fears | Business | guardian.co.uk