BA Shares valued at 55 pence!

[RVR800]

Europe's largest airline, British Airways, may be relegated from the FTSE index of the UK's 100 leading shares following a sharp fall in its share price.
BA's share fell 9% in early trading after two major investment banks expressed concern about its performance.

Goldman Sachs described BA as a "market underperformer" 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.

Less traffic

The gloomy statements came ahead of BA's passenger number report due later on Monday.

The report is expected to show that passenger numbers fell 25-30% in October.

In September, passenger numbers fell 22%.

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.

The airline's shares fell from their opening price of 146.5p after Goldman Sachs valued the stock at between 55p and 128p

[The Guvnor]

I seem to recall I prophesised this price around 6 weeks ago and was flamed by a number of people! :D :D

As I said then - when BA gets down to 75p, start buying. As long as they can sort out their debt problems, they are a good long term prospect; especially with Rod at the helm.

[Pengineer]

Currently sitting at £1.40.
http://uk.moneycentral.msn.com/investor/quotes/quotes.asp?Symbol=GB%3ABAY

http://www.stopstart.fsnet.co.uk/mica/FarSKid.gif

Pengineer

[Guvnor]

Best to avoid aviation shares altogether - keep to food, fuel and medicine. Always in demand - always safe shares.


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NOW what am I buying?!?

[Minesagrolsch]

The Guvnor,What are you talking about ?

"Especially with Rod at the helm"


I take it you don't work for BA then.RE has done nothing.He has hardly even been seen since Sept 11.Colin Marshall would have been in there at the deep end,rallying the troops.
Skippy is more likely preparing his escape,like he did at Ansett,just before the collapse.

[RVR800]

Guvnor

Why so glum - what about the L1011 operation
that you were so keen on?

[tailscrape]

The Guvnor,

What qualifications do have exactly for posting investment advice here on this forum?

I bet you don't have any at all do you in relation to stocks and shares? Or futures and options?

I agree that the shares are probably worth selling. In fact I had sold them short last week and bought them back first thing this morning. Nice little toe in the water, but be warned.....they may not fully collapse.

Just because a stock drops out of the FTSE 100 does not mean it's price will fall further. OK , top 100 tracker funds will bin it, but other funds, ie FTSE250 trackers will pick it up. Therefore, the net effect can be upward not downward in the relegation stakes.

Still, your posts do amuse me Guv. It really is just a shame you have no experience of how the London Stock Exchange works.

Whereas others do.

[knows]

" Skippy is more likely preparing his escape,like he did at Ansett,just before the collapse.".... I fear this is true also....

[Guvnor]

I recently bought some shares in a Firework company. They rocketed sky high to start with and then came down again.

[Mooney]

I believe First Class bookings are down 82 per cent

:rolleyes:

[Magnus Picus]

I believe that after the release of this 'news' that BA shares have gone up today by 1% (after the initial early morning fall). Care to comment?

[Minesagrolsch]

I believe The Guvnor should change his "name" to something more appropriate.How about The Pleb With Nothing Better To Do Than Post Inane Sh1** Here All Day.
Catchy,eh !! :D :D :D :D

[Best Western]

http://press.britishairways.com

Summary of the headline figures
Capacity in October, measured in Available Seat Kilometers, was 15.0 per cent below October 2000.

Traffic, measured in Revenue Passenger Kilometres, fell 24.7 per cent.

36.2 per cent decline in premium traffic
22.4 per cent fall in non-premium traffic.

Passenger load factor of 63.1 per cent - down 8.1 points on October 2000.
Cargo, measured in Cargo Tonne Kilometres, fell by 23.8 per cent.

Market conditions
Trading remains difficult. Traffic volumes for October were at the upper end of expectations but premium traffic remains more heavily affected than non-premium. However, premium traffic declines have become slightly less severe through the course of October, while non-premium declines have remained fairly constant. Capacity reductions during October helped to reduce seat factor declines through the month.

Forward bookings for November indicate a similar traffic decline to October, with the US, Middle East and Japan being the worst affected markets. Early indications for December suggest a slight improvement on November, although the outlook remains volatile.

Strategic developments
British Airways announced that it is to combine its two UK regional subsidiaries, creating the second largest regional airline operation in Europe. British Airways Regional (BAR) is to become part of the newly formed British Airways CitiExpress, creating a single entity for its short-haul regional domestic and European network. The combined regional business will have a turnover in excess of £600 million and a fleet of 92 aircraft serving more than 120 routes. The new entity will employ around 3,200 people and carry some five million passengers each year. The airline also confirmed a number of capacity, frequency and route changes.

British Airways entered into exclusive negotiations with Warburg Pincus for the private equity investor to acquire a majority shareholding in World Network Services (WNS), the airline’s India-based data management company. Negotiations are continuing with a view to reaching an agreement which would allow the future growth and development of WNS, with British Airways still retaining a significant stake in the business.

British Airways announced a new direct route between Manchester and Zurich from October 28. The twice-daily service will operate on a 49 seat Embraer 145 regional jet.

British Airways announced that Concorde services between London Heathrow and New York will resume on November 7, with the first flight for invited guests including UK Government representatives, business leaders, aviation figures and regular customers. Commercial flights resume on November 9 with an initial six times a week return service between London and New York, and from December a weekly service between Heathrow and Barbados.

[Notso Fantastic]

How nice others see through this arrogant, ignorant, instant 'expert' on all things aviation, even investments! Step forward GUVNERD, and take your award, the 'loudest mouth in aviation' award for being a total p****k! You are evidently hoping RE will see your simpering sycophancy and reward you with a BA directorship! Well, you have got the time available since your own pathetic aviation interests are non existent now! How could you hold out the hope for so many people and it was all hot air!!!. And now we have to watch you approaching 4000posts telling us all how it should all be done! Between you and 411A, you are enough to drive hard working pilots to an early grave!

[The_Banking_Scot]

Although the figures are bad at around a 24.7% fall in passengers, some analysts ( according to the bbc news web site covering the story" were predicting a fall of 30% so a 25% fall is "relatively" good news.

As to the information on the best shares to buy- obvioulsy it depends on a thorough analysis of the company and theenvironment it operates in but in the current bear market you would probably want to hold shaes that had a low correlation in movement compared to the general market ie " the defensive stocks" and the food sector is one of several that tends to be classified as defensive"
I will not go into the Investment Analysis theory in case i get fireworked here!!!
Of course I could be wrong and I'm puting on my helmet now.

Supporting BA on Wednedsay with EDI-MAN followed by company go-karting and then next month EDI-LHR-TXL and return

[Amazon man]

Can somebody tell me just what Rod Eddington has achieved in the airline business.

Cathay Pacific with one of the worst management/employee relations in the business and Ansett, well they are no more.

I suspect his time in BA will achieve very little and like most other managers in big British business he will leave with a fat paycheck totally out of proportion to what he has achieved during his period at the helm.

I stand to be proved wrong but I doubt it.

[shuttlecock]

Guvnor,

You do talk Sh*te some, no, most of the time. I hope that you have more success as in whatever it is that you do to fill in the time between postings on this forum than you would as a financial advisor.

FYI, BA shares only broke their all time low (NOV '87) by a whisker recently, which indicates that there is still plenty of solid support at that level; I suspect that you might be waiting for a long time before you are able to snap up BA shares for 75p. Keep up the posts, as someone said earlier, they can be quite amusing!

[The Guvnor]

Rather interesting report from the Beeb. Starts off on SN's woes, but then goes onto BA ... £775m projected as a full year loss! :eek: :eek: :eek:

And it seems that a number of brokers are talking about BA shares being worth around 80p ... so my 75p projection was pretty close to the mark! :D :D :D

SN/BA Report - BBC Business (http://news.bbc.co.uk/olmedia/1640000/audio/_1640356_airlines06_craze.ram)

[Magnus Picus]

Yesterday's reaction from the market -
BR.AIRWAYS ORD 25P

ask price 156.00
bid price 155.25
close price 155.25
last trade price 155.25
open price 140.50
sales volume 19,503,045

chng: 8.50
=UP 6.04%

Comments? :eek: :eek: :eek: :eek:

[Guvnor]

No comments - let's just wait and see.


--------------------
NOW what am I worth?!?

[tailscrape]

Guvnor,

You are a real twit you know.

ONE broker (lehman bros) reckon BA to be worth 80p. They are always very bearish.

You didnt answer my request to know what investment qualifications you have did you?

I still suggest you have none, so shut it.

On the other hand, if like me you have passed the SFA Securities Registered Representatives exams, as well as being a fulyy joined up and authorised UK and International dealer with the London Stock Exchange, you may have reason to sound like you know what you are talking about with this matter.

Somehow, I doubt you have these qualifications, so wind your neck in please. You are a real sod at times for wasting space on these forums!

And before you ask, yes i do fly for an airline now. These were all gained in my previous job.

you are the missing link Guv, Goodbye.

[The Guvnor]

Sounds like you didn't listen to the BBC clip I put a link to, Tailscrape!

And no, I don't have a lot of knowledge of the LSE - but does my time on the IPE back in 1990 when I was involved with creating hedging mechanisms using No 2 Oil for Jet futures (as despite strong lobbying the combined volumes of potential jet trades through the IPE, NYMEX and the CME were apparently not worth the while of those exchanges to set up a jet trading floor) worth something to you? :D :D :D

[Super Stall]

Oh please, Guv was that before or after you wrote your thesis on air transport management.

You are just soooooo BORING. :rolleyes:

Oh and if you did know anything about futures you would have realised that it is'nt the end user or an exchange that makes a succesful contract its the speculators (Its a depth and liquidity thing).They already have enough energy contracts to play with and would'nt have needed to play with yours. If I were you I'd remain focused on spouting crap about aviation and not be tempted to spread your lack of knowledge into other fields.

[Anti-ice]

Can someone disable the smilie option in 'The Guvnor' s postings?

His delight and satisfaction in the crisis facing aviation worldwide at the momnent is obvious and disturbing to say the least.

When the personal/financial security of so many is at stake, you would have thought that someone who claims to be an aviation professional would show compassion to his peers and not deride them/destroy their morale further at every given opprtunity.
(like he does).(constantly)

Sad t**t

- - - - - - - - - - - - - -

Now how long have I been online ?

[The Guvnor]

From today's Telegraph Questor:

You'd BA fool to board this low-flying aircraft

ROD EDDINGTON, the British Airways chief executive, used all his charm yesterday to reassure investors that there was no danger of the airline going bust.

"From survival to viability", trumpeted one slide he showed the City's planespotters, outlining the three steps to recovery: "Liquidity in place - rebuild cash flow - industry leader." If only it were that simple.

Post September 11, BA is burning towards £2 million cash a day. "No worries," said Aussie Rod: there's £3.4 billion fuel in the tank.

That includes more than £1 billion advance cash from passengers and a new £800 million loan facility, secured against about 20 aircraft. Then there's £1.5 billion of property and "investments".

As those investments are stakes in other airlines, including Qantas and Iberia, that's none too reassuring. But, if you believe BA, it has enough cash to keep airborne for at least three years, assuming things don't get worse.

That's hardly a reason to buy the shares, however, which yesterday fell 1.25 to 154p. Mr Eddington envisages a "prolonged" downturn, while his joint broker Merrill Lynch reckons it will lose £775 million this year and could fail to turn a profit before 2005.

Its strategy of chasing front-of-cabin traffic bound for America has turned the airline into an option on the US economy. Sure, BA's yields went up by 6.1 per cent in the second quarter - its busiest - but that's not much help if operating profits fall 73 per cent to £72 million.

Moreover, while Mr Eddington focuses on cutting costs and preserving cash, the likes of Ryanair and Easyjet plan to make hay - Ryanair's operating margins are currently nine times BA's.

BA will recover one day. But one reason the shares are trading below the group's 220p net asset value is that the market has not ruled out a deeply discounted rights issue. With no dividend to soften the pain, the shares are best avoided for now.

http://www.portal.telegraph.co.uk/money/graphics/2001/11/07/cxquest.gif

[Super Stall]

Why in Gods name have you chosen to use this boards valuable (and expensive) resources to post pictures that are in every single bloody newspaper I've read today!!!!

You're sooooo BORING. :rolleyes:

[mainfrog2]

Why does guvnor and one or two keep comparing BA with low cost operators. Yes they have to compete in Europe against them but in the wider world?

Also I read on teletext that although easy carried more pax this year their load figures actually went down to just over 82%.
Seeing as how easy and ryanair are expanding (more a/c more routes) it's not that remarkable that the number of pax they carry has gone up, but maybe their load fiqures have gone down.

I thought the low cost operators had to have fairly full a/c to make any money. All of the airlines seem to be doing the usual with their statistics.

Standing by to be informed otherwise

[tailscrape]

Your experience is not relative Guv, because as you point out yourself, it wasn't even up to being accepted practice.

I decided to take you advice Guv. I really think BA are going to 55p. Therefore I sold them short a while ago today. And guess what? They still keep going up!

About 160p now they are. Still, only another £1.05 to drop before I can pat you on the back and take you out for lunch for giving me such fantastic investment strategies to punt in.........

Go away.

[Magnus Picus]

08/11/2001

BR.AIRWAYS ORD 25P

ask price 181.00
bid price 178.75
close price 180.25
last trade price 180.25
open price 160.75
sales volume 33,379,901

Change since "The Guvnor" posted his pearl of wisdom -
UP 28.3%

I sincerely believe you are Mike O'Leary the way you prattle on

[ 08 November 2001: Message edited by: Magnus Picus ]

[overstress]

C'mon, Guv, reply to Magnus! We're all waiting for another pearl of your wisdom!