Sunday, September 7, 2008

BAs Rise In Current Market Turbulence

Business class airline Silverjet may have gone into administration after running out of cash, but this cloud had a silver lining for British Airways

British Airways shares recently rose to 232.5p, thereby topping the FTSE100 and listing it at the top of potential gainers. The Silverjet fiasco, removed another potential competitor for the ever lucrative travel market. The meteoric rise was further helped by the fact that UA and US Airways would be merging to combat their difficulties

Besides, any unexpected fall in oil prices would only be to their benefit as BA has once again raised its passenger fuel surcharge costs. As a result any dip in prices would be profitable

Once upon a time, British Airways was one of the world's most profitable airlines and now this is just the opposite. Its shares have become close to half of what it was in May 1997.

So where did they go wrong?

The era of jetting around in style in the business class has passed for many executives. Instead, now they op to fly economy or take one of the many cheaper seats available on the number of bargain price airlines operating short hauls

This is definitely not good news for neither British Airways nor its CEO Bob Ayling. Basically, times are tight and the simple fact that they are losing its hold on the highly profitable business class customers. What you have now is an airline in desperate need of changing fortunes.

In other words, BA and Mr. Ayling in particular have a bumpy time ahead. It would, of course, be a major blow to a man whose career has simply soared away.

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