British Airways has lost its place in the FTSE 100 - the share index for the UK's biggest companies by market value - for the first time since the airline was privatised in 1987.

Relegated

British Airways EMI Group International Power

Promoted

Tomkins Rexam Alliance UniChem

The FTSE Group confirmed on Wednesday afternoon that BA, along with music company EMI and energy firm International Power, would be demoted from the list.

The three companies will be replaced by engineering group Tomkins, packaging firm Rexam and healthcare group Alliance UniChem.

The changes were based on Tuesday's closing prices, and will apply from the close of trade on 20 September.

The Irish low-cost airline Ryanair said on Wednesday that it had applied to join the FTSE 100 to replace BA.

But a FTSE spokeswoman said it could not be admitted because, although its shares are traded on the London market, its main listing is on the Irish Stock Exchange.

Off the boil

BA's share price has tumbled over the past year as the airline has struggled to cope with the post-11 September downturn in the industry.

Fierce competition from low-cost carriers has also played a part in the sector's struggling finances.

The slump in air travel last year led BA to cut thousands of jobs and reduce the number of flights it offered as it sought to slash costs.

In May it reported full-year losses of £200m ($310m) - its worst results since privatisation.

Speaking to the BBC on Sunday, BA's chief executive Rod Eddington said: "No company that's in the FTSE wants to come out of it."

But he said he remained confident that if BA was relegated, it would soon return.

Out of tune

EMI Group is another stalwart of UK plc, but it too has had a torrid time recently.

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Earlier this year it announced a 40% fall in profits to £153m after what it called a "challenging year".

The music industry in general has suffered from falling sales and piracy problems.

But EMI has also had its own difficulties, including having to pay a £38m bill to extricate itself from a massive long-term deal with Mariah Carey.

Regular reshuffle

The make-up of the FTSE 100 share index is reviewed every three months.

A company's stock is promoted into the FTSE 100 if the firm's market capitalisation ranks in the top 90 at the close of business on the last day of trading before the review - in this case Tuesday.

If a stock is ranked 111th or lower, the company is ejected from the index and it drops into the FTSE 250.

Apart from the prestige of being in the FTSE 100, membership of the index can also benefit a company's share price.

If a firm joins the FTSE 100, managers of index-tracking funds are forced to buy the shares.