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British Airways reports surprise profit, Vueling suffers over concerns for Spain’s debt

8-Feb-2010

European markets were down for a second day on Friday (05-Feb-2010), dragging down airline shares, as investors continued to express concern over debt in Eurozone countries. Early in trading, investors were also concerned ahead of US unemployment data, released later in trading. However, the data showed an unexpected drop in unemployment, to 9.7% in Dec-2009. Oil prices slid 2.7% to USD71.19 per barrel in New York.

In major markets, UK’s FTSE (-1.5%), France’s CAC (-3.5%) and Germany’s DAX (-1.9%) all suffered solid falls.

Vueling (-6.6%) took the biggest fall again on Friday, as Spain’s SMSI fell 1.4%. See related report: Vueling suffers over concerns for Spain’s debt

Dart Group (-6.0%) was also down.

British Airways reports surprise profit, Finnair reports expected loss

British Airways (-2.4%) reported an operating profit of GBP25 million for the three months ended 31-Dec-2009, but its shares fell with the wider market. Meanwhile, Finnair (-2.6%), reported an operating loss of EUR39.4 million for the same quarter, in line with expectations.

See related report: British Airways’ surprise profit, Finnair’s unsurprising loss. A contrast in styles

Also during trading, British Airways CFO, Keith Williams, stated changes to the carrier’s future pension arrangements were unavoidable, and the carrier is not ruling out any options to deal with its GBP3.7 billion pension debt. The carrier is looking to make the changes in order to reach a merger agreement with Iberia (-2.5%).

Norwegian reports 21% reduction in yield

Norwegian Air Shuttle (-1.2%) meanwhile reporting a 21% reduction in both yield and revenue per ASK in Jan-2010 (to NOK0.48/EUR5.87 and NOK0.34/EUR4.15), for the largest year-on-year yield reduction in over 21 months.

El Al  (+0.8) was the only carrier to make gains, while Aer Lingus was flat.

Europe selected airlines daily share price movements (% change): 05-Feb-2010


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