STOCKS NEWS EUROPE-BA takes off on above forecast results

Shares in British Airways (BAY.L) rise 4.9 percent, topping the FTSE 100 .FTSE gainers' list, after the airline posts a better-than-exppected pretax loss of 292 million pounds in the first-half.

Broker BofA Merrill Lynch, which has a "buy" recommendation on the stock, says the latest data shows an encouraging trend in airline's traffic numbers and notes that the carrier sees premium class yields slowly improving. "We think the current low valuation (30 percent discount to historical average) does not discount potential revenue recovery and possible cost savings," the brokers analysts write in a note.

BofA Merrill Lynch says merger and acquisition-related synergies would be a further positive for British Airways if deals such as the alliance with Spain's Iberia are agreed.

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