Spanish airline suspends flights

Spanish-based airline LTE International has suspended operations after telling Spanish authorities that it was in serious financial difficulty.

LTE's website stopped taking bookings late on Thursday after it said it could not cover costs for the next few days.

The company said several thousand passengers had been affected by the cancellation of flights, including some who were stranded in Spain.

LTE runs flights from Spain to the UK, Italy and Saudi Arabia.

It has 300 staff and a fleet of seven Airbus 320s.

LTE said fewer than 100 passengers for scheduled flights were stranded in Alicante, Palma and Barcelona. They had been due to travel home to Norwich over the weekend.

It said it would refund the cost of their flights, but was unable to lay on alternative transport.

Separately, it said approximately 3500 LTE passengers had had their charter flights from Tenerife to destinations all over Europe cancelled.

They include 700 passengers who were due to return to Britain.

But LTE said British tour operators were legally obliged to find alternative carriers for these passengers. It said Cosmos and similar companies were already doing so.

Alternative flights

A Cosmos statement said: "Passengers currently in Tenerife who were due to return to Birmingham at 1125 and to Glasgow at 1735 today will now be flying on a Monarch Airlines flight into Manchester this evening, departing Tenerife at 2345, and will be transferred by coach for their onward journey to Birmingham and Glasgow.


"Passengers due to fly from Birmingham to Tenerife at 1225 lunchtime today will be transferred by coach to connect with the Monarch Airlines flight departing from Manchester at 1830 this evening.

"Passengers who were due to fly from Edinburgh to Tenerife at 0035 tomorrow, 18 October, are currently being contacted and will be offered a full refund or the opportunity to fly from Manchester on this evening's departure at 1830, returning to Manchester on 25 October."

Cosmos said about 320 people were due to travel back to the UK on Friday, with another 350 due back at a later date.

Text messages

LTE issued a statement saying that it was doing "everything to minimise the impact of this suspension of services" on its customers.

"After 20 years operating with maximum dedication to our clients, it just was not possible to avoid this situation, given world events lately," the firm said on its website.

Airline employees were told of the company's difficulties via text messages on their mobile phones.

The Spanish Civil Aviation Authority is due to decide whether to suspend LTE's operating licence.

Problems in the aviation industry have already brought down a series of small airlines over the past year.

The most serious collapse came in September, with the demise of XL Airways and its parent firm, the UK's third-largest tour operator.

Oil prices up before Opec meeting

Oil prices have risen, buoyed by Opec's decision to bring forward its emergency meeting by three weeks to next week.

Analysts expect the oil exporters' cartel to cut its output at next week's meeting, which would boost prices.

US sweet crude oil climbed $2 to settle at $71.85 a barrel in New York after losing more than $4 on Thursday.

London Brent crude added $1.76 to settle at $69.60 a barrel. But oil prices remain far below the peak of more than $147 seen in July.

Demand dip

The main reason for the fall since then has been a global economic slowdown, which has dented demand.

"Oil is dependent on strength in the economy but in order to have a sustainable rally we need to have proof that it has really improved or at least is not collapsing," said Thomas Stevoll, an energy strategist at UBS.

Adbullah al-Attiyah, Qatar's oil minister, said he thought Opec would reduce its daily output by one million barrels.

However, Odein Ajumogobia, Nigeria's oil minister, said no specific decisions had been made about the meeting.

Gold prices tumble

Gold prices failed to maintain its shine on the bullion market during the week on renewed offerings from stockists on the back of fall in overseas markets. Silver also dropped further on poor industrial demand coupled with negative global advi ces.

Gold prices headed for the biggest weekly loss in two months in London as equity markets rose around the world and crude oil prices declined, reducing demand for the metal as a haven and a hedge against inflation.

Yellow metal declined to a one-month low in New York on speculation that investors will sell the precious metal to cover losses in other markets. Gold futures for December delivery dropped to $787.70 an ounce on Friday on the comex division of the New Yo rk Mercantile Exchange.

The price slid 8.3 per cent from last week, the biggest such decline for a most-active contract since August 15. Silver futures for December delivery also declined to $9.335 an ounce.