British Airways has stormed into the morning's top gainers following strong rises in its share price yesterday on the back of the announcement of a possible merger with Spanish airline Iberia.
Shares in the British airline were up 4.1% to 258.75p today after German air carrier Lufthansa said a merger would be a positive move for the airline industry.
Analysts are also upbeat about the prospect of a merger.
Andrew Fitchie at Collins Stewart said that in the current economic climate, cost rationalisation is a realistic plan of action.
Assuming there is no change in flying staff numbers, but a cut in admin and management operations, the merger could bring some hefty savings for BA, provided that the oil price maintains a downward or steady path.
BA announces its first-Iberia quarter results on Friday and while these are expected to be bad with high fuel costs battering profit margins, the BA-Iberia tie up could be a key driver in shares.
