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24 二月 2020

Is British Airways heading for a summer of discontent – MoneyWeek

Butitsnotjustthepeoplewhomaketheplanesthatarehavingproblems。

Thepriceofoiliscausingallmannerofproblemsforairlinecompaniesthoughperhapsnotquiteinthewayyouwouldexpect

Thehigheroilpriceshouldbeaseriousproblemfortheairlinesector。

Buttheimpositionoffuelsurchargeshasenablednon-budgetcarrierslikeBritishAirways(BAY)topassonmuchoftheirincreasedcoststocustomers。

BApassengerscurrentlypay£35ontopoftheticketpricetoflyfromtheUKtotheUS£70forareturnticket,inotherwords。

The£35ismeanttocoverBAsrisingfuelcosts。

ButnowcompetitionregulatorsonbothsidesoftheAtlanticareprobinganumberofairlinesincludingBAoverallegationsofpricefixing。

TheprobeisthoughttocentreonairfaresandBritishAirwaysfuelsurchargesimposedontransatlanticflights。

SofarBAistheonlycompanythathassaiditisbeinginvestigated。

AmericanAirlines,VirginAtlanticandUnitedAirlineshavesaidtheyarealsoinvolvedintheprobe,butarenotdirecttargets。

BritishAirwaysfuelsurchargewasjust£2。

50whenitwasfirstintroducedinMay2004,andithasbeenhiked7timessincethen。

ButBAsnottheonlyonetochargeitspassengerspetrol(orratherjetfuel)moneyVirginintroduceda£2。

50chargeonitstransatlanticflights,alsoinMay2004。

TheTimespointsoutthatVirginandBAhavehikedtheirfuelsurchargesalmostintandemsincethen。

Thetwoairlinesraisedtheirchargesatthesametimeandbyalmostexactlythesameamount,fivetimesbetweenMay2004andSeptember2005。

TheonlydifferencewasthehikeinJune2005,whereVirginraisedthesurchargefrom£16to£25,whileBAhikeditfrom£16to£24。

TheOFThasofcoursestressedthat“noassumptionshouldbemadethattherehasbeenaninfringementofcompetitionlaw。



Butregardlessoftheoutcomeoftheprobe,itisstill“ahugeblowforBritishAirwaysatacriticalpointinitsrecovery,”saidAngelaJamesoninTheTimes。

ChiefexecutiveWillieWalshhasenoughonhishandsalready。

AsMsJamesonputsit:“WithdifficultindustrialrelationstonavigateovercomingmonthsoverworkingpatternchangesinadvanceofthemovetoTerminal5andpensionsBAcan’taffordtoletitsguarddown。



AndrivalsarealreadyswoopingintoscorepointsoffBA’swoes。

BudgetcarrierRyanair(RYA)whichisnotpartoftheprobewelcomedtheinvestigationwithmorethanahintofschadenfreude。

HeadofcommunicationsPeterSherrardsaid:SinceMay2004,thepriceofoilhasdoubledfrom$35to$70abarrelandBritishAirwayshasincreaseditsfuelsurcharge14-fold。

“WhenBritishAirwayscollectedmoreinfuelsurcharges(£470m)thanitsentireprofitaftertaxlastyear,somethingisclearlywrong。



AnalystsarealsoconcernedbythefactthatBAhasgivenitscommercialdirector,MartinGeorgeanditsheadofcommunications,IainBurnsleaveofabsenceduringtheinquiry。

MorganStanleyanalystPennyButcherdescribedthesituationassounding“ratherserious…Georgeiseasilyamongthetopfourorfivepeopleattheairline。



AndDeutscheBanksaid:“WewouldbeverysurprisedifaspecificissuerelatingtoBA’spricinghasdeveloped。

Unfortunately,though,puttingkeypersonnelonleaveisadifficultsignalforthemarkettointerpret。



TheOfficeforFairTradingcouldfineBAupto10%ofitsturnoverontheaffectedroutesifit’sfoundguiltyofbreakingcompetitionlaws。

Thatcouldbeveryexpensiveindeedupto£315m,accordingtoanalystsatUBS。

BAsharesfell6%tocloseat346pontheday。

Butthatwasfromafive-yearhigh。

Withthepotentialforindustrialactionthissummer,thedistractionsofthecompetitionprobe,andofcoursehighoilprices,allhangingoverthecompany,thisisonesharewecertainlywon’tbebuyingonthedips。

Turningtothewidermarkets

TheFTSE100endedup19pointsat5,684onThursday。

HousebuilderPersimmongained4%to£11。

93asmarketswereheartenedbyresultsfrommid-cappeerCrestNicholson。

Forafullmarketreport,see:Londonmarketclose

OverincontinentalEurope,theParisCac40gained28pointsto4,803,whiletheGermanDaxrose30tocloseat5,533。

AcrosstheAtlantic,USstocksheadedlowerasmoreeconomicdatasuggestedtheeconomyisslowing。

TheindexofUSleadingeconomicindicatorswhichisdesignedtopredicteconomicactivitysixtoninemonthsinthefuturefell0。

6%,morethanexpected。

Investorswerealsoconcernedastheyieldona10-yearTreasuryhit5。

2%,itshighestinmorethanfouryearsandasignthatmarketsarepricinginhigherinterestrates。

TheDowJonesIndustrialAveragefell60to11,019,whiletheSP500closed6pointslowerat1,245。

Thetech-heavyNasdaqslipped18to2,122。

Thesell-offonWallStreetdentedAsianstocks,thoughindicesclosedwellabovetheirmid-sessionlows。

TheNikkei225fell11pointsto15,124withinvestorsshiftingtowardsdomesticstocksfromexporters。

Thismorning,oilwaslowerinNewYork,tradingataround$70。

60abarrel。

ButBrentcrudewashigher,tradingataround$69。

45。

Meanwhile,spotgoldwastradingataround$583。

50anouncewhilesilvereasedback,slippingto$10。

14anounce。

AndintheUKthismorning,itseemsthatGoldmanSachs-ledbidconsortium,AdmiralAcquisitions,mayhavesealedthedealforUKportsoperatorAssociatedBritishPorts。

ABPortshasrecommendeda910ppershareofferfromAdmiral,8。

3%higherthananearlierbidof840pashare。

ButarivalconsortiumledbyAustraliasMacquariehassaiditisconsideringitspositionandhaswarnedshareholderstotakenoactionyet。

Andourtworecommendedarticlesfortoday

Shouldyouavoidinvestinginemergingeconomies?

Emergingmarketshavebeenhithardbythismonth’smarketcorrections。

Dothesemarketfallsrepresentabuyingopportunity?

Unlikely,saysMorganStanleysStephenRoach。

Fansofemergingmarketssaythatdevelopingeconomieshavelearnedtheirlessonsfromthe1997/98Asiancurrencycrisis。

Butthenextcrisisisneverthesameasthelast,andthebiggestriskstoemergingmarketsnowareverydifferenttowhattheywerebackinthe90s。

Tofindoutwhattheyare,clickhere:Shouldyouavoidinvestinginemergingeconomies?

Hasthebearmarketreturned?

SincethefirstwarningsignsofstockmarketweaknesswerespottedinIcelandinApril,fearhasspreadacrosstheworld。

Allassets,fromstockmarketstocommodities,havefallensimultaneously。

Butatsomepointtheywilluncouple:somewillcontinuetofall,whileotherswillprovidemajorbuyingopportunities,sayAndrewSelsbyandJohnRobsonfromRHAssetManagement。

Tofindouthowtospotthenextboutofstockmarketweakness–andtolearnwhichmarketswillbeworthkeepinganeyeon–clickhere:Hasthebearmarketreturned?

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