BA may fall out of FTSE 100

[The Sweeney]

from news.bbc.co.uk

British Airways could drop from the FTSE 100 on Tuesday.

UK airline British Airways could fall out of the FTSE 100 index on Tuesday, following a year of dwindling profits and share price.
BA chief executive Rod Eddington told the BBC on Sunday that he would "wait and see what Tuesday brings", but admitted the industry as a whole was still struggling after the events of September 11.

Mr Eddington said a war on Iraq would be another "major issue for all airlines".

BA's shares are one of three being tipped to fall out of the 100 index of leading shares at the next scheduled reshuffle on Tuesday.

Mr Eddington said even before the threat of a war on Iraq, demand among a number of major airline companies remained "soft".

He said this was not just because of travellers' apprehension but also because a number of companies were also struggling and therefore spending less on business travel.

British Airways has also had to compete with the cheaper "no-frills" airlines such as Easyjet and Ryanair, who are winning over customers.

In May, BA reported a loss of £200m. This was its first full-year loss since the company was privatised 15 years ago.

BA's shares have also slumped. A year ago they stood at 270p, but closed on Friday at just 135p.

British Airways is one of three companies which could fall from the FTSE 100 to the FTSE 250 when the index is reshuffled on Tuesday.

Music group EMI and electricity generator International Power are also possible candidates for relegation.

Mr Eddington told the BBC: "No company that's in the Footsie wants to come out of it".

But he said if BA did fall out, it would be back.

[Jet II]

BA could fall a lot further if the possible strikes by Engineers and Pilots go ahead.

Unfortunately strikes are the only thing that mismanagement seem to understand.

In the BA News job section its practically all ads for managers - the latest 'gem' is - Manager Menu's!

Now that skippy has managed to get us in a situation were we have more IM staff that flight crew, hundreds on gardening leave, manager to worker ratios getting worse, its all down hill fast now. - noticed skippy was blaming everything on 9/11 on tv this morning - are Easy, Ryanair, Go, Lufthansa etc on a different planet?

:mad:

[GustyOrange]

I never like to invest in a company where senior management comments frequently on their company's share price.

Frankly it is up to the market to determine company share prices and valuations, not the company's CEO.

[What_does_this_button_do?]

from news.bbc.co.uk @ 10th Sep, 19:00

British Airways is set to lose its place in the FTSE 100 - the share index for top UK firms - for the first time since the airline was privatised in 1987.

Chiefs in charge of the FTSE 100 will meet on Wednesday to settle the quarterly rejig, using Tuesday night's closing share prices as the basis for their decision.

But FTSE officials told the BBC that based on their league tables, British Airways - as well as music company EMI and energy firm International Power - looks on the way out.

Taking their place at the top table, the figures indicate, will be engineering group Tomkins, packaging firm Rexam and healthcare group Alliance UniChem.

Off the boil

BA's share price has tumbled over the past year as the airline struggled to cope with the post-11 September downturn in the industry.

Fierce competition from low-cost carriers has also played a part in the sector's struggling finances.

BA's shares staged a rally on Tuesday, standing more than 4% higher at one stage, putting the company within reach of FTSE 100 survival.

But the stock fell back to close 3.25p. or 2.5%, higher at 135p, in line with the average rise in London stocks.

Troubled times

The slump in air travel last year led BA to cut thousands of jobs and reduce the number of flights it offered as it sought to slash costs.

In May it reported full-year losses of £200m ($310m) - its worst results since privatisation.

Its share price has descended from a high of 760p in May 1997.

Speaking to the BBC on Sunday, BA's chief executive Rod Eddington said: "No company that's in the FTSE wants to come out of it."

But he said he remained confident that if BA was relegated, it would soon return.

Out of tune

EMI Group is another stalwart of UK plc, but it too has had a torrid time recently.

Earlier this year it announced a 40% fall in profits to £153m after what it called a "challenging year".

The music industry in general has suffered from falling sales and piracy problems.

But EMI has also had its own difficulties, including having to pay a £38m bill to extricate itself from a massive long-term deal with Mariah Carey.

Promising early sales of Coldplay's new album 'A Rush of Blood to the Head' are not expected to save it from the chop.

Regular reshuffle

The make-up of the FTSE 100 share index is reviewed every three months.

A company's stock is promoted into the FTSE 100 if the firm's market capitalisation ranks in the top 90 at the close of business on the last day of trading before the review - in this case Tuesday.

If a stock is ranked 111th or lower, the company is ejected from the index and it drops into the FTSE 250.

Apart from the prestige of being in the FTSE 100, membership of the index can also benefit a company's share price.

If a firm joins the FTSE 100, managers of index-tracking funds are forced to buy the shares.