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Airline shares slump on UK security alert

Dublin Airport - Airlines warn of severe delays
Dublin Airport - Airlines warn of severe delays

Airlines around the world cancelled hundreds of flights in and out of London after a foiled bomb threat sparked a security alert, throwing UK airports into chaos and pummelling airline stocks.

Airlines banned hand luggage on flights out of the UK and warned of severe delays at London's Heathrow Airport after British police said they had disrupted a plot to blow up aircraft in mid-flight.

Thousands of passengers were stranded after Aer Lingus, Ryanair, British Airways and other UK carriers said they were halting hundreds of out of London airports, while planes bound from Europe into Heathrow were temporarily grounded.

Passengers were told to stay away from the airport because of severe delays caused by heightened security checks. Airlines reported heavy traffic congestion on roads into Heathrow.

Aer Lingus said that 18 of its flights between Dublin, Shannon and Cork to and from Heathrow have been cancelled and no flights will be operating from Heathrow until at least 3pm this afternoon. The company estimates that more than 3,000 passengers have been affected. 

Ryanair says 47 of its flights from Stansted to Ireland have been cancelled.

Six flights to the UK from Cork Airport have been cancelled so far. Shannon Airport says four outbound flights to Prestwick and London Heathrow have been cancelled.

Aer Lingus has banned hand luggage for passengers who are flying to Britain and then getting connecting flights onto another destination. Mobile phones and keys are included in this ban.

All trans atlantic passengers are being told they can not bring any liquids onto planes. This includes toothpaste, shampoo and duty  free drinks. 

Ryanair shares closed down 3.5% at €7.29 in Dublin, while shares BA lost 5% to £3.70. Air France KLM was 3% lower and Germany's Lufthansa finished down3.2%. EasyJet shares also dropped 2% in London.

Analysts said news of the plot would have a short-term negative impact on airline stocks but not to expect losses as severe as September 2001 following attacks on the US.

Lufthansa, Air France KLM, Spain's Iberia and Greece's Olympic Airlines said all flights scheduled for Heathrow had been grounded. Alitalia also cancelled some flights.

BA said 22,000 passengers would be affected by cancellations and delays today.

Airlines as far away as Australia were affected. Qantas Airlines said it was limiting carry-on luggage for its flights from Britain and banning liquids on US-bound flights.

Airport operator BAA said it had asked airlines to temporarily halt all in-bound flights from Europe. It had no plans to close Heathrow but warned of severe delays.

Flights continued to operate from Gatwick and Stansted airports near London although some airlines were cancelling flights there, a BAA spokesman said.

The ban on hand luggage included mobile phones and handbags, as well as all liquids except for essential medicines. Milk for babies would be allowed on board but must be tasted by the accompanying passenger, BAA said in a statement.