Safety

DATE:15/08/06
SOURCE:Flight International
UK terror alert special: Airline stocks stable after initial fall

As news broke last week of the foiled terrorist plot, the financial community feared "another 9/11". Airline shares initially took a tumble. British Airways stocks fell around 20p (38¢) to a low of 370p on the London stock exchange on Thursday. But the sell-off was short-lived, and the airline's shares were heading up again by the end of the week.

"As we have seen after previous terrorist events the world will still fly," says analyst Robert Stallard of Bank of America.

Security sources have described the plot as "bigger than 9/11" and aviation analyst Chris Tarry says if the attacks had been successful they would have prompted "a huge drop in traffic", although numbers would eventually have picked up, as they did after 9/11, when fares fell and passengers adjusted to the increased level of perceived risk. Last week's thwarted plot "logically shouldn't have any impact on traffic as the threat was intercepted and appropriate measures are put in place", says Tarry.

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