Raising the price of airline tickets helps IAG offset oil cost increase
BRITISH Airways owner
swerved the worst of the stocks rout gripping markets after offsetting the damage from surging fuel prices with higher ticket prices. The airline sector’s shares have crash-landed in recent months amid mounting fears over rallying oil prices and a no-deal Brexit bringing chaos to the skies over Europe.
But the FTSE 100 giant shrugged off a 13.5pc spike in fuel costs in the first nine months of the year after a 1.3pc climb in passenger revenue. Operating profit nudged ahead of City estimates at €1.46bn (£1.3bn).
IAG is “doing some pretty impressive work on underlying operating improvements” and is “managing to fill more seats on its planes while also getting a benefit from pricing”, said George Salmon, an analyst at Hargreaves Lansdown.
After climbing as much as 3.4pc in intraday trade, IAG gave up its gains to fly 1.8p lower to 585.6p, slightly ahead of the wider index. Elsewhere, drugmakers
Astrazeneca and
Glaxosmithkline slipped back after Donald Trump vowed to tackle high drug prices in a last-ditch bid to woo American voters ahead of the midterm elections.
The US president proposed slashing the amount Medicare – the federal health insurance programme – pays for drugs in order to bring prices in line with other developed countries. He warned that he would end “one of the most unfair practices” that allows some countries to pay “20pc the price”. Credit Suisse called it “a shot across the bow” for drugmakers.
FTSE 100 pharma giants Astrazeneca and Glaxosmithkline, which both generate around a third of their sales in the US, slipped back 57p to £57.55 and 22.8p to £15.09, respectively. Butchers chain
Crawshaw plunged 0.4p to 2p after admitting that it could be forced to tap investors as part of its turnaround plan.
It insisted that no decision has been made on an equity raise but ruthless investors sent its shares sliding to a new record low. Embattled travel group
TUI dropped to a one-year low after UBS warned investors that its hotel earnings have already peaked.
The bank’s downgrade to “sell” knocked TUI a further 36p to £12.71. Its shares have now slumped 30pc since their record high in May. Randgold Resources
topped the FTSE 100 as gold prices continued to benefit from the global retreat in risk appetite. Gold prices spiked as much as 1.1pc to $1,243.60 per ounce, a fresh three-month high, while Randgold closed 218p higher at £64.16.
Retirement financial services specialist Just
Group extended its rally after the Bank of England delayed its decision on an overhaul of rules on equity release mortgages by a year. It topped the FTSE 250 index, recovering a further 6.6p to 90p.
The FTSE 100 briefly tumbled to its lowest level since 2016 after disappointing third quarter results from Google and Amazon reignited jitters on markets. The FTSE 100 eventually closed 64.54 points lower at 6,939.56 at the end of a turbulent week on global markets. The S&P
500 was tipped into correction territory by a 2.9c plunge as tech shares continued to suffer the heaviest damage in the rout.