Airlines cancel flights on bomb plot, shares drop

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European airlines cancelled hundreds of flights into London on Thursday following a foiled bomb threat which sparked a security alert at UK airports and pummelled airline stocks, reports Reuters.

Airlines banned hand luggage on flights out of the United Kingdom 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.British Airways said it was temporarily halting all short-haul flights to and from Heathrow Airport.

Passengers were told to stay away from the airport because of severe congestion and delays caused by heightened security checks.BA led European airline stocks lower, falling 3.6% to 376 pence by 0925 GMT. Air France KLM was 2.7% lower at 19.22 euros and Germany's Lufthansa was off 3.2% at 14.18 euros.

Lufthansa, Air France KLM, Spain's Iberia and Greece's Olympic Airlines said all flights scheduled for Heathrow had been grounded until at least 1000 GMT. Alitalia also cancelled some flights."There are serious problems at Heathrow and the airport is completely saturated and we cannot land planes there," an Air France spokeswoman said.

Lufthansa said 22 flights to Heathrow with about 3,000 passengers had been cancelled until 1200 GMT.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.