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British Airways primed for emergency fundraising

It has been revealed that British Airways is currently in talks with institutional shareholders regarding a possible emergency rights issue which would raise significant funds to see the company through its current problems. Rumours suggest that up to £500 million could be raised by British Airways in the short term as the company looks to cut costs and reinvigorate the balance sheet which has taken a battering of late.

Despite many people assuming the recent statements from British Airways were nothing but a scare tactic to get the unions and employees onside it seems as though the company really is in trouble. The unpredictable price of oil over the last two years together with a significant reduction in airline travel appears to be behind the fall from grace. It will be interesting to see where the company goes from here as mergers and takeovers continue to attract attention in a sector which is crying out for significant cost-cutting.

While it would be wrong to suggest that British Airways is on the verge of collapse, how ironic that as we start to move out of the UK recession a company with a name and reputation of British Airways appears to be struggling more than ever.

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