BA shares fall as pressure mounts

British Airways shares sank into the red today as speculation continued to swirl over its financial woes and trading prospects.

The stock fell as much as 8%, with comments from Virgin Atlantic tycoon Richard Branson urging the Government not to step in with state aid fuelling worries.

BA – currently in talks with unions over staff cuts and pay – was reported over the weekend to be considering a move to offload its OpenSkies subsidiary only a year after acquiring it.

And it was said today to be under fire from the guardians of its embattled pension fund, who reportedly believe the airline took risky investment decisions that exacerbated its estimated £3bn (€3.5bn) funding deficit.

BA hit back at suggestions it is seeking British government support.

A spokeswoman said: “BA is not in talks with the government and there won’t be any talks.

“We are opposed to state support and our position on that has not changed.”

But the group has been open about its troubles, asking staff last week to consider working for a month without pay following news that chief executive Willie Walsh and finance boss Keith Williams will do so next month.

BA posted its worst ever annual loss since privatisation in 1987 earlier this year, slumping into the red by £401m (€476m).

It was hammered by soaring fuel costs in last year’s oil price bubble and has since seen the bottom fall out of the premium traffic market as firms cut back on spend in the recession.

It is thought BA’s own recent gloomy forecasts may be designed to smooth the path for union agreements.

A June 30 deadline for the talks is looming large, with BA seeking resolution on difficult staff concessions, such as pay, hours and further job cuts.

It is looking to reduce its 40,600-strong workforce by a further 3,000 on top of the 2,500 jobs which have already been cut since last summer.

Staff pay has also been frozen, while pilots are being asked to accept shares in the company in return for a pay cut.