BA cleared to take off to FTSE 100

British Airways was today given clearance to return to the top flight of the London stock market.

The restoration of the airline as a blue-chip company was confirmed following a quarterly review by the FTSE Equity Indices Committee.

BA, which will make its return to the FTSE 100 Index on December 22, lost its premier status in March after its share price crumbled to 86p in the run-up to the Iraq war.

However, BA is now among London’s 80 biggest companies with a market value of £2.38bn (€3.4bn).

Shares have trebled in the past nine months to 249p, although shares were down 7.75p to 220p in a weak market today.

BA has been promoted along with recruitment services company Hays, which is returning to the top flight after a brief absence. The pair will replace Provident Financial and pubs group Mitchells & Butlers.

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 recently that BA would continue to seek ways of reducing costs on top of cuts already announced.

Arla Foods and Northumbrian Water are among companies due to join the FTSE 250 Index – at the expense of groups including ebookers and Holidaybreak.

Thirteen companies, including financially troubled groups MyTravel and British Energy, have been demoted to the FTSE Fledgling Index.

The FTSE reshuffles its benchmark index every three months to ensure only Britain’s biggest companies are included in the prestigious club.