European airline shares moved higher on Wednesday (18-Aug-2010), after El Al and SAS reported improved financial results for 2Q2010 and oil prices (-0.5%) fell to USD75.42. The rise was despite falls in wider European markets, pushed lower by declines in the commodities sector, due to profit taking, as well as the mining sectors.
In key markets, UK’s FTSE (-0.9%), Germany’s DAX (-0.3%) and France’s CAC (-0.4%) all ended the session lower.
El Al (+6.1%) was the day’s biggest gainer, after reporting a net profit of USD14.8 million for the three months ended 30-Jun-2010, compared with a loss of USD19.7 million in the previous corresponding period. The carrier also reported an operating profit for the quarter, at USD25 million, compared with a loss of USD24.5 million in the previous corresponding period.
CEO and President, Elyezer Shkedy, attributed the performance to its “very focused commercial policy”, which he stated resulted in a 25% increase in revenue over the period to USD498.5 million. The carrier also ended the quarter with a 101% rise in operating cash flow to USD82.8 million.
El Al achieved a market share of 38% for the period, after boosting capacity. Load factor rose 2.5 ppts, to 80.1%.
See related CAPA Profile: Market Share
SAS (+3.1%) also advanced after the carrier narrowed its losses for the three months ended 30-Jun-2010, to EUR53.1 million, compared with a net loss of EUR111.1 million in the previous corresponding period. CEO, Mats Jansson, stated that adjusted for the Apr-2010 ash cloud affects, the group generated a profit of EUR49.1 million for the period.
SAS also announced plans to reintroduce long-range aircraft at an unspecified date to boost frequencies to North America and Asia after experiencing record load factors on its long-haul services. The carrier will also increase services between major Scandinavian cities due to recovering demand.
See related CAPA Profile: Traffic and Capacity
Aegean Airlines (+0.9%) gained marginally, despite reporting a net loss of EUR32.6 million for the six months ended 30-Jun-2010, compared with a profit of EUR13.4 million in the previous corresponding period. This was the result of a 3.0% decline in revenue over the period to EUR267.4 million.
Passenger numbers for the period were stable, at 2.9 million, as domestic passenger numbers declined and international passenger numbers rose. More positively, load factor during 1H2010 improved by 4.2 ppts, to 64.8%.
Managing Director, Dimitris Gerogiannis, stated the carrier must now focus on destinations where it “maintains a competitive advantage either due to our new Airbus A320 fleet or due to our entry into the Star Alliance”. The carrier is banking on the “possible imminent approval” of its merger agreement with Olympic Air, stating this will expand its profile in summer 2011, “which is necessary for both our company and our country”.
Elsewhere, Norwegian (-3.3%) declined on SAS’ improved performance, while Vueling (-1.3%) and Aer Lingus (-1.1%) also ended the session lower. Turkish Airlines (+2.6%) and Thomas Cook Group (+2.3%) rose for the day.
Europe selected airlines daily share price movements (% change): 18-Aug-2010
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