Is British Airways being targeted by the shorters?
It has become apparent that over the last few days the number of short positions in British Airways has increased with the number of shares "on loan" rising from 22.47% to 29.54%. This is effectively investors selling British Airways shares (which they do not own) in the hope that the share price will fall, they will be able to buy back the shares, close their positions and create a profit.
It is believed that further union friction is on the way even though the courts this week ruled that the company was acting lawfully and within the bounds of individual employment contracts in cutting costs by reducing the minimum number of cabin staff required for certain journeys. The friction between the union and the British Airways management has continued to build for some months now despite the fact that both parties would appear to be after the same result, a stronger and more profitable British Airways.
This is a reflection of the growing union anger at the number of cost-cutting exercises across the UK economy, not just British Airways, and the number of job losses already announced and in the pipeline. This friction is unlikely to reduce in the short term until the economy recovers and pressure on company cost bases declines.
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