BA 'set for Footsie return'

British Airways is poised for a return to the FTSE 100 Index following a six months absence, it was reported today.

The airline, which lost its place in March after its shares crumbled to 86p in the run up to the Iraq war, should be re-admitted to the top flight when membership of the blue-chip index is reviewed in two weeks’ time.

Shares have rallied to 225p, valuing the company at almost £2.5bn (€3.6bn) and placing it among the London market’s top 80 companies.

That should be enough to earn BA a place in the top flight, although there is still time for the position to change.

It will be the second time in a year that BA has won back its place in the Footsie after making a brief return in December 2002. Prior to that, BA had been an ever-present since its flotation in 1987.

While prospects for the airline have brightened in recent months, chief executive Rod Eddington warned three weeks ago that it would continue to seek ways of reducing costs on top of cuts already announced.

The Business newspaper also forecast that the reshuffle, based on closing prices on December 12, would herald tentative signs of a tech sector revival.

That is because former Footsie member Logica, the IT services group which has merged with CMG, is valued at £2 billion and in the running for the top flight.

Hays, the logistics group currently in the process of reshaping itself as a recruitment specialist, is also set for a return.

That could be at the expense of Foreign & Colonial Investment Trust, as well as Provident Financial, Alliance UniChem and Mitchells & Butlers, all of whom are at risk of demotion.