It’s outrageous and extraordinary

It’s outrageous and extraordinary.” However, he is an optimist. “The law of economics will ultimately prevail, but in this industry it will take a lot longer.” Much also depends on the recovery in business travel and on better economic conditions. Eddington has cautioned not to expect any upturn for a year at least.Meanwhile, BA has some rather large internal issues to deal with. “The way I see it, there are two elephants in BA’s rowing boat,” says Eddington “One of them is the pension, the other is the debt. The debt’s come down from just over £7bn to just under £5bn in the last two years.

The pension is a major priority for our company and our people, and it will be October before we know how that will affect us.”BA is in the midst of an actuarial valuation of its two pensions funds, expected to show a deficit of up to £1.5bn. This will mean BA could be forced to pay anything up to £100m a year to replenish the fund, something it can ill afford. What BA needs is for the stock market to recover and solve this problem But good fortune and BA don’t tend to be friends. “I’ve had a lot of luck over the past three years,” Eddington jokes “All of it bad.”. The August bank holiday heralds the beginning of the end of summer in the City, no less than in the rest of the country. After a pitifully quiet few weeks, over the next few days blue chips start reporting again, and in one particular case some investors could be in line for a windfall of up to £500m.

The City has been left in suspense over whether the maker of Disprin and Harpic will return its substantial cash balances to shareholders or spend the money on acquisitions. It had been rumoured that the group would buy SSL International, the maker of Durex condoms, yet a deal has so far failed to emerge. The group said it would update investors on the cash situation at the end of August, and City broker Investec Securities estimates money earmarked for shareholders will be around £500m.Mergers and acquisitions also get a fuel-injected kick-start in the shape of a much-anticipated battle for Canary Wharf. The fight is due to get under way on Thursday when the owner of London Docklands is expected to receive three offers. Vying for the company are Bascan, the Canadian property firm that already has a 9 per cent stake in Canary Wharf, Goldman Sachs and Morgan Stanley.Analysts expect the offers to be around the £1.7bn mark – nearly £220m more than Canary Wharf’s market value on Friday.

An independent committee of non-executive directors, led by Sir Martin Jacomb, will consider the bids, and a decision is expected by mid-September. Paul Reichmann, the chairman of Canary Wharf, is expected to team up with the winning bidder.Canary Wharf’s reputation was tarnished when it emerged in March that tenants had the right to hand back vacant space The City claimed it was kept in the dark about this. US investment bank Lehman Brothers is expected to decide in the next few weeks whether to hand back 179,000 sq ft of office space that could depress Canary Wharf’s share price, which closed on Friday at 253p.From a corporate perspective, there will be trading updates from WH Smith and Scottish & Newcastle, although the brewing giant is likely to stay tight-lipped about the ongoing sale of its pub division. And while British Energy is forced to sell its electricity at absurdly low prices, the rest of the industry is beginning to reap the rewards.The three-way bidding battle for Drax, the UK’s largest coal-fired power station, is a product of the spike in prices. Wholesale prices have soared 29 per cent since these contracts were agreed. The plan was to shield British Energy against further falls in prices With hindsight, the decision was rotten. To put it in context, this is nearly six times the company’s market value.
It wasn’t supposed to be like this.