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British Airways under more pressure

Yesterday's attempted terrorist attack on a plane bound for the US has led to a massive crackdown on security and substantial delays on all flights to the US. The US authorities have pushed through a number of immediate security "improvements" which will see hand luggage restrictions put in place and see companies such as British Airways incurring significant costs. This could not have come at a worse time for British Airways, with the company fighting the unions, a growing pension fund deficit and pressure on passenger numbers.

While it is not just British Airways which will struggle under the new security regime, pushed through at very short notice, the fact that the company made a loss of £401 million last year and has a pension fund deficit approaching £4 billion had already reduced the company's strength. It seems inevitable that the increased cost of security, delays at airports and additional costs for staff and crew members will make it more difficult for British Airways to improve its financial and trading position in the short term.

Whether this will impact upon rumours of strike action in the New Year remains to be seen because ultimately unless the unions and the British Airways management can come to an amicable agreement there may be big trouble ahead for the company.

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