BA under Investigation

Elena
22 Jun, 2006
New York City

British Airways said it was assisting the Office of Fair Trading and the U.S. Department of Justice with their investigations, with Virgin Atlantic and American Airlines also cooperating with the investigation. European and U.S. officials refused to provide details about the probe. After the announcement BA shares were down 4.9% at 349.75 pence in midmorning trading on the LSE.

[R]8:00AM BA investigated for alleged price-fixing.[/R]
British and U.S. agencies are reportedly investigating alleged price-fixing by British Airways and other airlines on passenger fares and fuel surcharges. BA said it was assisting the Office of Fair Trading and the U.S. Department of Justice with the investigations, with Virgin Atlantic and American Airlines also cooperating with the investigation. BA shares tumbled following the announcement, and were down 4.9% at 349.75 pence in midmorning trading on the LSE.

American Airlines said that it ‘has received a United States federal grand jury subpoena in connection with a government investigation into alleged price fixing in the air passenger industry.' Eight other airlines, Ryanair, bmi, Continental, Lufthansa, Finnair, KLM, Icelandair and SAS, said they were not being investigated. But SAS AB's SAS Cargo in Copenhagen, Denmark, said the EU alleged that cooperation among airlines began in 2000 and involved agreements about surcharges imposed by airlines to offset certain external costs. SAS said the costs included surcharges on fuel, added security after the Sept. 11, 2001, attacks in the U.S., and premiums for war-risk insurance after the start of the war in Iraq.


[R]7:15AM Asian stocks finish higher on Japan’s trade data and overseas gains.[/R]
Asian markets closed higher. The Nikkei 225 Average closed up 3.36% to 15,135.69, making its first break above the 15,000 level in two weeks. Sentiment was upbeat on the release of the economy ministry''s all-industries index, which advanced 1.3% in April from March, the first gain in three months. Camera maker Canon gained 3%. Consumer electronics company Sony climbed 2.3%. Chip-equipment maker Kyocera surged 4.6% and Toshiba Corp. added 2.8%, advancing as the electronics maker gave a press briefing late in the day to launch its next-generation, high-definition optical disc recorder. In Hong Kong, shares followed the regional trend. The Hang Seng Index advanced 1.1% to 15826.70, as some investors considered a global correction based on concerns over rising U.S. interest rates and inflation had been overstated. Taiwan shares also finished higher as strength in U.S. markets overnight sparked bargain hunting on the local exchange. The Weighted Price Index of the Taiwan Stock Exchange gained 185.56 points, or 2.9%, to 6485.15, bouncing back from a six-month low Wednesday, when it shed 1%.Construction companies led Thursday''s gainers, advancing 5.2% overall, followed by electronics firms, which accounted for 73% of volume and advanced 4%.Markets in South Korea, Singapore and Australia gained more than 1%. Shanghai and Wellington were 0.8% higher. Shares listed in Shanghai slipped slightly.


[R]6:30AM European shares gain on overseas rally and resource stocks.[/R]
European markets traded higher in mid-morning session. The U.K. FTSE 100 index rose 1% to trade at 5,723, the German DAX Xetra 30 index advanced 1.3% at 5,573 and the French CAC-40 index added 1.1% at 4,826. Mining shares such as Anglo American Antofagasta, and oil companies, including BP and Royal Dutch Shell, were among the top gainers in Europe. Allianz announced plans to reduce nearly 7,500 jobs as part of a restructuring plan targeting stronger earnings. The company advanced 1.7%. Lafarge, the French building materials group, advanced 3.3% after it lifted its mid-term targets and said it was considering selling its underperforming roofing business to help boost profits. Deutsche Borse advanced 4.2% and Euronext gained 2.9% as investors digested the latest comments from Euronext’s suitors. John Thain, chief executive of the New York Stock Exchange, denied any possibility of making him abandon his bid for the bourse operator.

U.S. light crude oil for August advanced 64 cents to $70.97 a barrel, putting up nearly a dollar on Wednesday, in a gasoline-led rally. European benchmark Brent advanced 65 cents to $69.82. The dollar fell slightly against the euro. The 12-country currency bought $1.2663, up from $1.2660 Wednesday evening in New York. The British pound advanced on the dollar as well Thursday, rising to $1.8457 from $1.8447. The dollar dropped against the yen, to 114.85 yen from 114.87.