Tough times, but I'll add to my BA holdings

A colleague mumbled last week: "My British Airways shares aren't doing very well." Indeed they were not. It may have been a remark made in less than the best possible taste in the appalling circumstances, but it brings home graphically and dramatically how those much quoted words "this changes everything" could come true. If some of the world's leading airlines were allowed to go bust, that would assuredly change our lives.

The impact on the airlines has been dramatic. Time for patriotic buying. Not much sign of that, when Wall Street re-opened on Monday, lopping 40 or 50 per cent off the value of airline stocks, but still...

The airline that seems to have suffered most unfairly from the aftermath of the events of Tuesday, 11 September is Stelios Haji-Ioannou's easyJet, which could once do no wrong. There are good reasons for this. More than most, easyJet relies for its cut price success on fast turnaround for its planes; 20 minutes someone told me. Stricter security checks will hamper this. Employing properly trained armed security guards would be expensive, and erode easyJet's already thin margins. Fuel and insurance will go up and people will be afraid of flying. Formidable obstacles for a fledgling.

Set against that, though, I just can't see armed guards on the Aberdeen to Luton run, and it should be enough on the shorter-haul stuff to simply lock the cabin doors. Plus a couple of big long-term trends at work. First the growth in air travel will surely recover, just as it did after Lockerbie and other disasters; second, no-frills players such as easyJet will continue to have a market.

So I buy a few of Stelios' finest, at £3.43 and £3.13 only to watch them slump to sub-£2.60 or so in days. This is uncomfortably reminiscent of my chasing Marconi down the pan and round the u-bend a few weeks ago, but I'll stick with it. Not sure how Stelios, who I think retains a 32 per cent stake, must be feeling. I also add to my holding in British Airways, at its 10-year low of £1.58, because it's still an efficient carrier with an excellent reputation, and I think the market's overdone it. As has rightly been the case with Northern Ireland, I don't think governments will allow legitimate businesses to go bust just because of terrorism.

Not that the prospects for legitimate businesses and their share prices were looking particularly rosy before last week's atrocities. The autumn, as the doyenne of private investors, Bernice Cohen pointed out in the Sunday papers, is historically a treacherous time for markets even without the destabilising efforts of suicide bombers. We are in for some more volatility, although with the Fed already cutting rates so boldly, the authorities seem willing to do what they can. Rather more cheerful food for thought arrives in the post. Ask Central's results are as tasty as its pizzas, with turnover and profits up about 30 per cent, though the unchanged divi is the size of a (very small) doughball.

The share price is off recent highs, and worth keeping an eye on. And a longer-term perspective arrives, the interim report and accounts of the Foreign and Colonial Investment trust. The Trust is well-known as a cautious investment with low costs and charges that has delivered solid returns since its inception in 1868. They have included their usual table comparing returns from the trust with those from a building society account and the RPI. Routine propaganda, but notice in the table how the deposit account has been making ground up against the RPI in recent years.

Then note also the poor performance of the fund in the first half of the terrorist-ridden-high-oil-price-1970s. In any case, F&C has delivered its 31st consecutive increase in the dividend. When with-profits polices have had such a bad press, the merits of a sensible, broadly based, established global trust such as F&C become more than apparent, and being overweight in Shell and BP Amoco will do it no harm, either. One last thing that was striking about the week was the way the rolling news channels rose to the occasion. The coverage on BBC News 24, CNN and Sky was excellent, enhancing the prospects for broadcasting over the next decade or so. But I see BSkyB has been drifting since the big retreat from TMT, so it's cheap and I decide to buy a few at £6.50. But at a time like this, no one's much in the mood to concentrate on money for long.

s.ogrady@independent.co.uk