After taking a big hit yesterday on the back of Ryanair's dire results, BA is now heading the list of gainers on the FTSE100 today, with shares up by 7.8% at 252.75p.
The leap in shares came after the airline said it was in talks with Spanish carrier Iberia about a potential all-share merger.
Meanwhile the FTSE100 has tipped into positive territory, with the index up 0.5% at 5340.2.
However, it looks like it will be a volatile day's trading with a flurry of weak data hitting global stocks.
French consumer morale is low, while a CBI survey during mid-morning today revealed a record fall in retail sales. Many retailers took a battering on the market this morning as the gloomy economic outlook continues.
Carphone Warehouse, Debenhams and Burberry joined them, shedding value by 2.96%, 6.3% and 4.6% respectively.
Shares in Wolfson Microelectronics, which makes chips for portable music players including Apple's iPod, also slumped by by more than 10% to 109p as the firm said weaker economic growth was forcing it to be more cautious. The company reported flat third-quarter profit and announced jobs will be cut to fight the downturn.
There is muted optimism as investors look ahead to the opening of Wall Street later this afternoon. Dow Jones futures are already down marginally and the Merrill Lynch writedown is likely to spook traders.
