British Airways Receives Tentative Approval

Struggling airline British Airways finally received some good news on Monday morning after the US Department of Transport offered tentative approval for a proposed joint venture with American Airlines and Iberia, amongst others, to create a global pact.

Dominic Turner
shareprices.com - Monday, February 15, 2010

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The proposal would allow the airlines to share costs and they would be required to give up just four transatlantic take-off and landing slots, a suggestion that incensed Virgin Atlantic founder, Sir Richard Branson. Sir Richard was quoted on the Digital Look website, saying, "The Department of Transport last time said that in order to address the competitive harms hundreds of slot pairs had to be handed over permanently – nothing has changed since then. Four slot pairs is a complete joke and those responsible for this decision should hang their heads in shame."

Nevertheless, British Airways was the best performer in the FTSE 100, up 3.7% on the news. Approaching midday the leading share index was up 40.36 points overall to 5,182.81, helped not only by British Airways but by rallying banking and commodity stocks. Citigroup raised its earnings forecasts and target prices for domestic British banks, which helped to lift Barclays (due to report full-year figures on Tuesday), Lloyds Banking Group and Royal Bank of Scotland (RBS) into positive territory by between 1.2% and 3.1%. HSBC, whose business extends to Asia, the Americas, the Middle East and Africa and Standard Chartered also found favour with investors, gaining 1.5% and 0.6% respectively.

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