GSK orders European staff not to fly

Drug-maker GlaxoSmithKline has ordered staff in Europe not to fly for at least a week following the disruption caused by the volcanic ash cloud.

GSK managers were told last week that the travel ban is to allow those stranded in "far flung locations" the chance to return home. "GSK is focussed on making sure that employees get back to where they need to be," said a spokeswoman, adding that the company is: "Focussed on their safety."

The company was affected by the chaos as it depends on air freight to transport medically critical products. It feared that supplies may have been affected had the disruption continued.

GSK will post strong profits and dividend payments this week for the first three months of the year. The numbers come on the back of strong vaccine sales and growth in emerging markets such as India and China. Analysts expect GSK to report a pre-tax profit of £2.1bn for the first quarter, up £169m on the same period a year earlier.

Despite upbeat comments from GSK management in advance of results on Wednesday, analysts are warning that the next three quarters could be more challenging. Demand for swine flu drugs is expected to drop markedly and US President Barack Obama's healthcare reform will likely slash profits across the sector later this year.

"The outlook for the remainder of 2010 will undoubtedly be tougher," said a Deutsche Bank research analyst, adding: "The second half of 2009 included an estimated £1.5bn of pandemic flu related sales, which at this point looks unrepeatable."

GSK's chief executive, Andrew Witty, is also expected to discuss the impact of a restructuring which saw big cuts in UK offices as GSK looks to scale back work in Europe and North America and focuses on developing countries. Shares in GSK are down 30p on the week to 1238p.

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