Monday brief: British Airways

BRITISH Airways is sounding positive, of late, with regard to future performance, saying that the fallout from the security scares at Heathrow and other British airports back in August hasn't hampered overall business too much.

It is, however, now suggesting that its overall full-year revenue - former Aer Lingus supremo Willie Walsh’s first full year at the helm - will show growth of between 5% and 6%, rather than the slightly higher growth of 6%-7%, as previously anticipated.

'The world's favourite airline' (if you don't count Ryanair, of course) publishes its second quarter and interim results on Friday.

"Market conditions continue to be good and most segments of the business are recovering well from the events of August. However, as expected, September transfer traffic volumes - particularly in premium cabins - were affected by carry-on baggage restrictions. Volume in premium short haul also continues to be soft for the same reason," management told shareholders last month.

Headquarters: Waterside, Harmondsworth/Heathrow, Middlesex

Senior Management: Willie Walsh, chief executive; Martin Broughton, chairman; Keith Williams, chief financial officer

Market Listings: London Stock Exchange

Year-End: March 31

Current Share Price: stg£4.64 12-Month High: stg£4.65 12-Month Low: stg£3.07

Turnover: stg£7.8 billion

Pre-Tax Profits: stg£415 million

Operating Profit: stg£540 million

Earnings per share: 23.4p

Market Capitalisation: stg£5.1 billion

Other Details: Citigroup Global Markets in London has raised its target share price for BA to stg£5. It is also predicting that the airline should reach its targeted 10% earnings margin by full-year 2008. In the meantime, however, it is warning of a possible pensions fallout - with the possibility of BA pilots taking strike action, not ruled out.

"BAs proposals to keep defined benefit scheme and raise retirement age to 65 looks reasonable," according to Citigroup analyst Andrew Light. The analyst is ruling out, however, a takeover by Emirates, due to foreign ownership problems.

Buy/Sell/Add/Hold: Citigroup has recently downgraded the BA stock to ‘Hold’.