BA shares take off after strike averted
British Airways shares made healthy gains today as the first session since the company averted a costly Bank Holiday strike brought cheer for investors.
With New York oil prices also holding steady at below $50 a barrel, the stock topped the list of risers in the FTSE 100 Index with a 2% gain.
BA shares stood at 217.25p, a rise of 5p but still short of the 278p seen at the start of last month after worries over higher fuel costs and potential industrial action proved to be a drag on the stock.
Analysts had warned a 24-hour strike by baggage handlers and check-in staff would cost the company as much as £15m (€22.2m). BA also took a £40m (€59m) hit to profits from wildcat strikes by staff at Heathrow last year.
Hilary Cook, of Barclays Stockbrokers, said: “It’s a relief they’ve resolved the dispute but it’s important they keep getting their cost base down. Unfortunately this may well lead to conflict with unions.”
BA has agreed an 8.5% pay increase over three years as well as £1,000 (€1,500) payable in three lump sum payments between now and September 2006.
The deal was agreed in the early hours of Saturday after four days of intense negotiations between the company and union officials.
Leaders of the Transport and General Workers’ Union and the GMB will now recommend the deal in fresh ballots of BA workers.
The agreement follows acceptance by the unions of what BA described as a company-wide sickness absence policy which will be introduced immediately.
Under the new policy, BA will aim to reduce the present level of sickness absence from an average of 17 days per worker every year to 10 days within 12 months.
