March 19, 2010
If you are thinking about traveling on British Airways, you might want to hold off for a few days. A three-day strike of cabin crews is set to begin this Saturday. This comes after British Airways CEO Willie Walsh and Unite labor leader Tony Woodley were unable to come to terms on salary. British Airways has responded to the strike by canceling more than 40% of their flights from this Saturday to next Wednesday. 103,000 passengers have already cancelled booked flights, costing BAY $47 million. With all this controversy the share price must have decreased substantially, right?
Couldn't be further from the truth. Year-to-date, British Airways shares have jumped 30%, based on a combination of Walsh's willingness to tackle the unions and the company's merger plan with Iberia Airways. Walsh has also announced that he plans to set up an alliance with American Airlines in order to recover its transatlantic traffic.
Over the long run British Airways' will be just fine. This weekend however, it appears that they will be flying through a patch of turbulence.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).