A disastrous week for duty-free: latest news and updates

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Read RavenFox.com's coverage of the airport security alert in full, plus a round-up of the latest developments worldwide

Fragrance, liquor, perfumes and cosmetics sales dip by 7% at Singapore Changi . . . The Nuance Group North America division records a 75% decline in sales at Canadian airports and calls for compensation . . . Aerofirst continues to sell liquor, cosmetics and fragrances to US-bound passengers at Sheremtyevo airport despite hand-luggage ban   . . . Air New Zealand passengers allowed normal carry-on luggage except for aerosols, liquids and gels . . . Food and beverage airport stores in the US report sales growth due to flight delays . . . Estee Lauder shares fall 6% since new security measures imposed . . . Ryanair attacks UK government's "nonsensical and ineffective" hand-luggage rules . . . global duty-free sales fall by up to 15% . . . UK Air passengers will be limited to one piece of carry-on luggage for the foreseeable future say UK government and aviation agencies . . .

Pre-order could address security restrictions, says Hjartbo

MyTravel Airways Scandinavia duty-free manager Lars Hjartbo has suggested that pre-order services could provide a way to continue duty-free operations should restrictions be imposed

MyTravel Airways Scandinavia does not run routes to the UK and the US so has "not really" been impacted by the tighter security measures that have been implemented globally since a terrorism plot was revealed last week. But MyTravel Airways Scandinavia duty-free manager Lars Hjartbo said: "In case restrictions are imposed in the future over the items allowed in the trolley we can still operate the pre-order service. We will deliver pre-ordered products to the passengers after landing at the destination so they do not have contact with products before leaving the aircraft."

Nuance-Watson (Singapore) backs gate deliveries at Changi

Travel retailer Nuance-Watson (Singapore) has voiced its support for the recent decision by the Civil Aviation Authority of Singapore (CAAS) to introduce the gate side delivery of duty-free purchases

Nuance-Watson (Singapore) has voiced is support of duty-free gate deliveries at Singapore Changi airport. Nuance-Watson (Singapore) executive general manager and global head of category fragrances and cosmetics Ken Tse told RavenFox.com: "As announced by CAAS, we have participated in making deliveries to the gate for selected US flights. It has resulted in some additional staff hours but we fully support the initiative and quite happy that CAAS is pro-active as usual."

In a recent statement CAAS confirmed that passengers may proceed with their liquor and fragrances purchases at Changi airport. It made the following exceptions: "To allow passengers departing from Changi Airport, on flights affected by restrictions on liquids, gels and aerosols and fragrances, we have made special arrangements with the shops and the airlines to facilitate these purchases without compromising on the security requirements set out by other airports.

Special arrangements have been made for liquor and fragrances purchases to be brought directly to the gate hold rooms for passengers travelling on Singapore Airlines flights to the US, United Airlines flights to Hong Kong and Narita and Northwest Airlines flights to Narita."

To take advantage of these special arrangements, passengers must make their purchases at the shops at least one hour before the flight time departure and collect them immediately after clearing the security screening checks at the gatehold rooms.

Other exceptions also included passengers travelling to the UK or India to connect to another flight and passengers flying to the US or Canada through a stop over point.

BAA Bonds "to be downgraded" due to terror threat

Sources quoted in Wednesday's Times say that the cost of BAA's £4.7b of outstanding bonds will "soar" due to a reported downgrading by global credit ratings agencies

The Times reports that BAA has asked the Association of British Insurers to facilitate negotiations with BAA bond holders as concerns over the terror threat, and possible compensation claims from airlines, affect the company's financial health. Potentially adding to BAA's credit rating woes is the fact that new owner Ferrovial  is expected to part-fund its takeover by means of a refinancing deal based on cashflows from the BAA business. Bankers speaking to The Times said that BAA's cashflows look likely to be damaged as a result of increased security measures, compensation claims from airlines and airport retailers, and a reduction in sales at World Duty Free.

However, John Hatton, a debt analyst at Fitch Ratings, points out that BAA's bonds have been on "ratings watch" with the main ratings agencies since the Ferrovial takeover. "I think the idea that this terror alert has suddenly caused thoughts of a downgrade of BAA's bonds is far-fetched," he said. "What is at issue is what Ferrovial will have to put in place in terms of a financing structure for its BAA deal. And that is what will cause ratings changes. It is too soon to say what effect, say, a reduction in duty free income will have on BAA's financial health."

Cathay increases L'Oréal stock to address demand

Carrier Cathay Pacific has increased its holding of L'Oréal stock following the security alert

Airline Cathay Pacific has increased the number of L'Oréal items it carries, following the announcement that passengers going to the UK, US and France from Hong Kong International airport would not be able to bring their own liquid skincare items onboard.

Inflight sales and logistics manager Cindy Lam said: "We have increased the loading of the L'Oréal single piece Revitalift mask so that passengers can buy and use it during their flight and to keep their faces moisturised. This has been introduced from a customer service perspective."

She added: "We have not seen any particular surge or drop in skincare, fragrance and liquor items after security measures were tightened. We have a special announcement advising passenger not to buy liquid duty-free products if they are transiting in Hong Kong for onward connection to specific countries [UK, US and France] and travelling to those specific countries with an onward connection, because items might be confiscated at check points before the onward flight."

US duty-free sales permitted through aircraft delivery

Guidelines issued by the Transportation Security Administration have handed the US duty-free industry a lifeline by permitting sales if purchases are delivered directly to the aircraft

Duty-free sales in the US will be permitted if purchases are delivered directly onto the aircraft. This was the message delivered in a statement to travellers from the Transportation Security Administration (TSA) today.

The International Association of Airport Duty Free Stores (IAADFS) has been negotiating with the TSA to clarify the situation for its members in the US. The TSA statement said: "Due to enhanced security measures most liquids, gels, lotions and other items of similar consistency will not be permitted in carry-on baggage. These types of items must be packed in your checked luggage. Duty-free items are permitted if delivered directly onto the aircraft. However, passengers making connections from international to domestic flights must transfer the items to their checked luggage before boarding their flights. At pre-clearance airport passengers must put duty-free items into their checked luggage since the aircraft deplanes behind passenger security checkpoints."

The statement emphasised that duty-free policies will, however, differ by airport and advises passengers to contact the airport they are travelling from to check its status before departure.

The TSA announcement also noted that travellers departing from the following cities to the US need to pack duty-free items containing liquids or gels into their checked baggage - Aruba, Bermuda plus Calgary, Edmonton, Montreal, Ottawa, Toronto, Vancouver and Winnipeg in Canada and Freeport and Nassau in The Bahamas.

When passengers land in the US after leaving these cities they do not go through customs and therefore will not have access to their checked baggage. Due to security restrictions they will not be allowed to board a connecting flight in the US with liquids and gels.

Duty-Free sales dip 10-15% says IAADFS

International Association of Airport Duty Free Stores executive president Michael Payne said that sales in the United States have fallen in the wake of the terror alert

Payne commented yesterday that the ban on carrying liquids on board US bound flights has hit sales by 10-15%. Duty Free sales in the United States amount to about $7bn, said Payne.
 
However, Payne said he didn't expect the down turn to be permanent. Many US airport retailers are now implementing gate deliveries.

Los Angeles International Airport spokesperson Tom Winfrey said that duty  free shopping for alcohol and other liquids was now proceeding after clarification from the Transportation Security Administration that the airport's system of having items delivered to passengers as they boarded was acceptable.

Comment: Will the liquor industry cope?

It's the news every duty-free liquor retailer dreaded hearing. Last week's last-minute foiling of a sophisticated terrorist plot involving "liquids" smuggled onboard as many as ten trans-Atlantic flights has put the long-term future of the travel-retail liquor business in jeopardy

Liquor still represents almost a fifth of the global $27bn duty-free and travel-retail market and nearly 16% of sales at airports. Its market share has been shrinking in recent years as other product sectors have prospered. Yet operators still view it as a core category and a key footfall driver. It is difficult to see how airport retailers could remain in business if the worst-case scenario happened, and liquor was removed from the shelves completely. 

This is unlikely to happen, but the current muddled situation is making long-term forecasts difficult. "It's too early to predict the long-term implications for the liquor category," said Maxxium Global Travel Retail president Erik Juul-Mortensen, echoing the view of many suppliers. "We are seeing a confusing picture with different airports around the world reacting differently. I am hoping things calm down quickly and sanity prevails."

There is little sign of this happening yet. At UK airports the security threat was downgraded from "critical" to "severe" today, but confusion remains about what travellers can and cannot take into the aircraft cabin. BAA has confirmed to DFNI that passengers on all but US-bound flights can take duty-free liquor, bought after security, onto their flights, but as yet this message is not filtering through clearly to TV and radio bulletins. Clearly, the liquor industry has an interest in long-term clarity.

The outlook at US airports, where duty-free liquor sales totalled $178m last year, is considerably bleaker. While the Transport Security Administration (TSA) has given airports such as Miami and Los Angeles employing planeside deliveries the green light to continue selling liquor, the majority of airports have stopped sales completely. Many stores have been deserted and expensive bottles of spirits bought by customers unaware of the new regulations have been dumped in the trash.

The current restrictions within the US and on US-bound flights are unlikely to remain in place indefinitely, but every day they continue it is costing operators and suppliers tens of thousands of dollars. More worrying still is what long-term decisions the transport authorities on both sides of the Atlantic will take with regards to how duty-free liquor at airports will be sold.

"The viability of liquor sales in the air has been up for discussion for a long time," noted Yngve Bia, president and ceo of duty-free industry analyst Generation. "It's often been argued that a bottle of spirits could be a potentially dangerous weapon. With last week's events, that issue will be back on the agenda in Europe and the US with much more urgency."

A high-profile industry defence of the airport retail business has already started with leading operators stressing the security of the duty-free supply chain and the close vetting of shop staff, but more placatory action from retailers and suppliers might well be needed in the coming months. Given its inherent volatility, itÕs likely that liquor rather than fragrances or cosmetics that will receive the most flak.

In the US, for instance, it has already been suggested that planeside rather than gateside deliveries of duty-free liquor (and fragrances) may have to become the norm. Suppliers may also have to put tamper-proof seals on all bottles to ensure their integrity. Measures such as these will undoubtedly increase costs, but may appease public concern and overzealous authorities considering a total ban.

Airports and operators are already marketing their arrivals stores, collection and home shipment services much more forcibly and this trend is bound to continue and intensify. The duty-free liquor category at airports will surely survive this scare, but a proud business which can trace its roots back to the first duty-free shop at Shannon airport in 1947, may have to jump through a few hoops to do so.

Facts & figures (2005)

UK duty-free liquor sales: $228.6m

US duty-free liquor sales: $178m

Wine & Spirit Sales by Channel

Airports: 46.9%

Airlines: 6.5%

Ferries: 15.2%

Other: 31.3%

Source: Generation

BAA clarifies baggage restrictions

A BAA statement has clarified at lunchtime today the rules concerning what can be taken on to flights out of BAA's UK airports

The statement was: "For today, all items purchased before security will either need to be consumed or packed into luggage and checked in to the airline concerned.

Once through security, all passengers, except those travelling to the USA, will be able to take all items purchased in the departure lounge onto the flight. Passengers to the USA are not permitted to take liquid or gel products purchased in the departure lounge into the cabin. Any beverage items must also be consumed prior to boarding. These particular restrictions are for passengers flying to the USA only and will apply until further notice. US-bound passengers will also be subject to a secondary search at the departure gate.

These restrictions will obviously change tomorrow morning because of the relaxation of hand-baggage restrictions."

The BAA spokesperson went on to say that throughout the day the restrictions will be lifted at different times and in different airport locations. "It will take some time before these changes work through," said the spokesperson.

BAA delays new hand baggage rules

BAA has delayed implementing new hand baggage rules until early Tuesday morning as UK government lowers terror threat level

Following a reduction in the UK terror threat level from "critical" to "severe" early on Monday morning and the relaxing of government rules on what passengers can take on board flights, BAA has announced its intention to continue with its current restrictions on hand baggage until security procedures can be brought into line. The airport operator said that allowing passengers to resume taking cabin baggage onto flights would severely slow down security checks which are already causing backlogs of flights out of the UK. Airlines have been asked by BAA to cancel 20% of flights from Heathrow on Monday.

But British Airways chief executive Willie Walsh criticised BAA for not being sufficiently prepared. "BAA is unable to provide a robust security search process and baggage operation," he said.

The new rules announced by the government at a press conference on Monday morning will now be implemented by BAA at 0430 BST on Tuesday morning. Until then, passengers will have to conform to security measures in force since the alert began on Thursday last week. Passengers are restricted to carrying on board a clear plastic bag with previously designated "essential items" such as passport, tickets and prescription medicines only.

In an early morning press conference, Home Secretary John Reid announced a lowering of the current UK terror threat level from "critical" to "severe" and Transport Secretary Douglas Alexander announced new security measures. A single piece of cabin baggage will be allowed, but must not exceed a maximum length of 45cm, width of 35cm and a depth of 16cm. All liquids will remain prohibited.

Narita anticipates effects of new security measures

The Japanese airport and NAA Retailing predict a significant decline in duty-free sales while temporary anti-terror measures prevent the sale of liquids

Duty-free stores at Tokyo Narita airport have stopped selling liquids to passengers travelling to the US and to those on US carriers regardless of destination, according to Wall Street Journal Asia. The airport and principal retailer NAA retailing have both predicted that the move, enacted after passengers on those flights were banned from carrying liquids on to planes following last week's terror alert at UK airports, will result in a significant drop in sales.

Narita spokesman Ikuo Uda reported that some shops had put up signs alerting customers to the ban, while others were checking with customers before they made their purchases. "Given the situation, sales are likely to decline," he said.

Principal retailer NAA Retailing, which operates several stores in Narita's new 3,500sq ft Nakamise mall in the south wing of terminal one, said it was pushing sales of non-liquid cosmetics including lipstick and eye shadow in order to keep sales up. Senior vice president Iwa Matsu said: "We are expecting sales to drop by about 10%-20% but we can't be sure at this point.

IAADFS reports "mixed" situation in US stores

The International Association of Airport Duty Free Stores (IAADFS) has reported a "mixed" picture across stores in the US following a major terrorism plot yesterday

The International Association of Airport Duty Free Stores (IAADFS) has reported that the situation is "mixed" across stores in the US following an increase in security after a major terrorism plot was uncovered yesterday.

IAADFS executive director Michael Payne said: "The activity is mixed in each setting until the airlines, retailers and Transport Security Administration are in synch. Almost everyone has stopped selling fragrances and liquor products. But in some airports, such as Miami, 'plane side' deliveries of duty-free are still operating. At the moment we have an influx of information and expect more clarification over the next few days. I know that one Caribbean retailer has stopped trading altogether as its main business is liquor and fragrances."

Travel retailer Northwest Duty Free told Ravenfox.com that all duty-free gate deliveries had been stopped at its stores at Everett Washington, Port Angeles, Reno/Tahoe International and Washington airports.

He agreed the trading picture remained confused across the US but said Northwest was trying to be more creative with its gifts products such as jewellery, clothing and glass. "What we are trying to do with the duty-paid business is to ship products that are over $50 to customers domestically." However, he emphasised that the travel-retail stores could not sell lotions, such as shampoo or even lip balm or mascara.

He said that it had been a "challenging time" and he was concerned about keeping his staff "fresh and motivated". "I have told them to use the time constructively to re-stock or shift products, but the decision about the future situation is out of our hands," said Bellency.

He added: "Duty-free has always been resilient through wars and disasters but we need to think about this problem on a global basis."

UK landside retailers' business still under threat

UK landside retailers tell RavenFox.com they are confused and concerned at remaining in business under strict security

Landside retailers across the UK's regional airports are either closing shops or remaining open under stricter rules imposed by the Department for Transport and individual airports.

A retailer at Liverpool John Lennon airport's landside facility said he was shocked at the way the airport was refusing to place signs on the concourse advising passengers not to purchase goods unless they are able to place them inside suitcases before checking in.

"The airport has told us that if we want to put our own signs out, that's up to us. The airport is overcrowded with signs and so the retail department is refusing to place any more information for passengers.

"But we also aren't being told what to expect," he said. All but two of the landside outlets have closed at the facility. The airport was unavailable for comment.

Health and beauty retailer Boots told RavenFox.com "Where possible our shops are open and we're taking a steer from the airports on the situation, although the small airports seem to be more meticulous on their security measures at the moment.

"We know that many passengers will be feeling anxious and concerned at this time and we're committed to doing all we can to help.  Our airport stores will be open for 24 hours where necessary, and we'll be giving away any essential items that passengers need while they wait, such as nappies, wipes, baby formula and food as well as essential healthcare items.  Our pharmacists are also working across stores to make sure we can supply passengers with any emergency supplies of prescription-only medicines that are needed, and our healthcare teams will be on hand to give healthcare advice or help to anyone waiting for their flights."

Bristol International Airport's commercial department is encouraging its landside retailers to remain open and continue as normally as possible. Airport marketing spokesperson Claire Norris told RavenFox.com "Some of our retailers are placing their own signs in front of their stores. WHSmith has placed signs prominently on its newspaper, books and magazine racks advising passengers not to purchase anything until they enter the airside area."

The layout at Bristol enables passengers to see the shops before check-in. "If passengers do need to buy anything airside they can then pack it in their luggage before checking it in," she said. "However it's quite obvious that sales are dipping in the landside area."

At Manchester Airport the commercial team has been active in its assessment of the situation. A retail spokesperson said: "All our landside shops remain open. However we've reduced their opening hours from 4.30am-10pm to 6am-6pm. This is because we can't sell to passengers in terminals 1 and 2 because the shops are situated post-check in. Retailers in terminal 3 are luckier," he said. "The shops are closer to check in, giving passengers time to purchase and pack items into luggage."

Airside fashion outlets are showing encouraging sales under the situation, the spokesman revealed. "If passengers are able to wear the items they've bought on the flight, they are able to buy them."

"We aren't sure if we will be offering retailers compensation or rent reductions," he continued. "For now we are simply focusing on the daily challenges this poses."

Industry will cope, says WDF's Riches

Speaking to RavenFox.com today, World Duty Free managing director Mark Riches said that although the security situation remains serious, the industry will cope well

World Duty Free's Riches told RavenFox.com that customers need to be reassured that there is no blanket ban on liquid sales and that airside retailing is "among the most secure" operation in airports.

"It's obviously a serious situation, but to be honest we're used to disruptions and security concerns," he said. "The industry has a long history of dealing with major incidents and disruptions to the business and to customers. It's part and parcel of the industry we're in. But there's a well-oiled machine that swings into action where we communicate regularly with staff, customers and partners. This security threat was sudden, but we can cope. The staff are made of stern stuff and they've been through this sort of thing before.

Our absolute prime concern is the safety of our customers and staff -everything else is secondary to that.

There's a simple message to get out: passengers to North America cannot take any forms of liquid on board. So although there are no restrictions on what they can buy airside, in practical terms, they can't buy wines,
spirits or fragrances. We want to make it clear, though, that it only applies to travelers to the US. For all other destinations, there is no change. We think it's a sensible precaution, though, and we understand it's necessary. And we're supportive of that. But it's important for the industry to make sure the customers have clarity.

In fact, when you look at the situation unemotionally, the airside retail environment is one of the safest and most secure places in the airport, and sells the safest and most secure items to the public. It is a heavily regulated and secure environment. If you look at the products that are sold airside, it is known exactly what happens to them from warehouse to shelf.

Our suppliers have their own security protocols in place, as do we. We need to get it across just how safe the product environment is.

Things change in the industry. We work closely with our airport operation colleagues and all the regulatory authorities.  We have to be responsible, and we have to work with what's in front of us.  We have to do what is sensible.

I think it's reasonable to say that the industry will bounce back. It has historically responded robustly to recent global event of any magnitude, whether it's the SARS epidemic or European duty free restrictions or gate gourmet or whatever. In a way, we are a barometer for world events. But you knuckle down and deal with.  I am confident that the industry will get through this current challenge and will continue to be a very important part of the airport experience for the customer.

Tourist arrivals "will recover over next two weeks"

The World Travel and Tourism Council says global tourism figures will recover in the next two weeks, but that the impact on tourism of the foiled terror plot is still "significant"

The short-term impact on tourism of flight cancellations at US and UK airports is significant, according to World Travel and Tourism Council president Jean-Claude Baumgarten.
 
Speaking to RavenFox.com about the damage done to global arrivals since a plot to bomb ten transatlantic flights was foiled, he said: "The short term impact of US and UK flight cancellations on tourism figures is significant, partly because we are in peak season, although it is difficult to measure accurately what the effect has been so far."
 
He added that in the medium to long-term, the impact of flight cancellations at US and UK airports should be minimal. "Past experience is proving that the tourism industry is increasingly resilient to the effects of tragic events. It took about three years for tourism figures to recover after the events of September 11, but just a month to recover after the Madrid bomb and six months after the London bombings."
 
In 2005 international tourist arrivals rose by 5.5% to 808m, while duty-free sales rose by 8% to $27bn. In 2004, tourist arrivals rose by 10% on the previous year, while duty-free sales rose by 22%, showing the correlation between tourism and duty-free sales.
 
Baumgarten predicted a recovery to normal arrivals figures within two weeks. "We are not too concerned about the long-term impact on tourism."

British Airways suspends onboard duty-free

British Airways has voluntarily removed its duty-free offer from all its aircraft leaving UK airports

British Airways has confirmed to RavenFox.com that it has voluntarily removed all its duty-free goods from every one of its aircrafts leaving the UK.

A British Airways spokesperson said: "We considered just making it applicable for US-bound aircraft but have decided for our own safety and for passengers' safety to remove the entire duty-free programme for every flight."

"This is for a number of reasons. Passengers are unable to carry liquid onboard with them. This means that they aren't able to bring their own bottles of water with them for long-haul or short-haul flights. We are in the process of restocking every trolley with extra food and beverage provisions to give out to passengers."

While airport security measures impinge on groundstore liquor and fragrance sales, airline sales should be booming. Current security rules mean that airlines are still able to continue selling onboard, including liquor and fragrances.

British Airways' voluntary removal of its duty-free programme is in contrast to the stance taken by long-haul rival Virgin Atlantic. Earlier today Virgin Atlantic confirmed to RavenFox.com that duty-free sales are booming as a direct result of stringent airport security, especially the ruling that duty-free liquor must be consumed before boarding.

The impossible ruling that fragrances must be consumed before boarding is also having a direct result on sales in Virgin Atlantic's beauty category, a spokesperson for the airline said.

The Department for Transport confirmed to RavenFox.com that heightened security measures at UK airports "may remain for some time. While we are at this critical level of security I foresee that we will continue to maintain the stance we have taken."

BAA confirms "business as usual" at UK airports

UK airport operator BAA has confirmed that its "business as usual" for retailers at UK airports following a major terrorism plot

A BAA spokesperson confirmed: "There are no restrictions on retailers apart from those in place as part of the security precautions. This means that consumers can still buy liquid products such as liquor and fragrances even if they are travelling to the US as long as they consume them before they get on the plane."

UK security alert hits fragrance and liquor sales

Fragrance and liquor sales to passengers travelling to the US have been stopped at some UK airports following a major terrorist plot. Ramifications for Airport Retail 'very serious' says TRF's Goddard

Industry sources at UK airports have indicated that passengers travelling to the US are no longer allowed to take liquid onboard their flights following a major security alert, which has stopped liquor and fragrances sales to travellers heading to North America at some duty-free stores.

Alpha Airports Group group commercial director David King confirmed that fragrances and liquor are not being sold to passengers flying to the US. He said: "For any other destinations sales are as normal at our stores but purchases must be put in clear plastic bags which not a problem for us as Alpha bags are clear anyway. I understand that some airports have had their landside stores closed while others are trading as normal."

He added: "I think at the moment it's a problem of communication and passengers are now being searched by hand to ensure 100% security." Alpha's store portfolio includes outlets at Manchester, Newcastle and Birmingham.

Heightened security has been imposed at UK airports after a terrorist plot was foiled by anti-terrorist police. Home secretary John Reid said a major terrorist plot to bring down a number of aircraft mid-flight has been detected. He said there would be "major disruption" at airports across the country.

Passengers will be unable to take any hand luggage on flights as a precautionary measure, creating long queues at check-in. Delays and late cancellation of flights are also expected. Lufthansa, Iberia, Air France and KLM have all currently cancelled flights to the UK and British Airways has cancelled all short-haul flights until 3pm today, while Heathrow has now closed to all incoming flights. Brussels airport has cancelled all flights to the UK and Geneva Airport has cancelled all flights to the UK until at least 3pm.

Speaking to RavenFox.com, the UK Travel Retail Forum's Barry Goddard said: "I share everyone's concern at what has happened. We have to hope that the precautions the authorities have taken will prevent anything happening. It could be a few or even weeks before things settle down. The long-term ramifications for our business could be very, very serious."

British Airways, Ferrovial share prices down on airport fears

Spanish construction group's share price falls on airport uncertainty. British Airways off £130m

The share price of Gruppo Ferrovial, which successfully bid for BAA in July, suffered a 3% hit this morning on the back of security fears at UK airports. The British Airways share price fell by 5.5% on early trading, before bouncing back to hover at 3.5% in mid morning. Some $63m (£33m) was wiped off Ferrovial's market capitalization.

BAA has been marginally affected by the turmoil, losing just 1% on early trading.

British Airways is currently off by £130 million after losing £200 million off its share price in early trading.

"British Airways is pretty much the only company affected on the markets at the moment," commented Richard Hunter at stockbrokers Hargreaves Lansdown. "The one thing the market hates is uncertainty, so they took a reasonable hit this morning. But now that things are becoming clearer, the share price has come back a bit. We'll have to wait and see what Wall Street does when it opens later today."