London, July 04: British Airways Plc said on Thursday it was luring back passengers with cheap fares, boosting its shares as hopes rise the airline industry is recovering from war in Iraq and a deadly virus outbreak in Asia. Europe's biggest airline, severely hit by an industry-wide slump since the September 2001 attack on the United States, said passenger traffic rose 5.8 per cent in June from a year ago.
But it also said it was cutting fares and that first-quarter revenues would be well down on the year before as a result.
British Airways (BA) shares closed up 5.5 per cent at 163 pence, after touching a two-week high of 163-1/4p, outperforming a 0.5 per cent rise in the FTSE-100 index of leading UK shares.
Airline stocks had earlier been boosted by Dutch carrier KLM, which noted some recovery on Asian routes since the outbreak of Severe Acute Respiratory Syndrome (SARS) peaked in the region. KLM has the biggest exposure to Asian destinations among European carriers.
Analysts welcomed the improvement in BA's traffic figures, but said it was too early to talk of a sustained recovery.
Bureau Report