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Virgin Blue outlook improves; Norwegian yields slump in Jan-2010, US traffic on the improve

9-Feb-2010

Virgin Blue (shares up 2.7%) was upgraded by Goldman Sachs JB and RBS, following the carrier’s earnings revision last week.

Goldman Sachs has revised its earnings outlook to reflect a “swifter than expected recovery in domestic yields, as well as an improved outlook for V Australia”, while RBS commented that "management continues to paint a cautious picture for the remainder of FY10 given volatility in the markets, but we note the increasingly positive tone of outlook commentary and we see conditions continuing to strengthen”. RBS added, “we therefore wouldn't be surprised to see the FY10 result come in at least towards the top end of the guidance range”. 

See related report: Qantas leveraged to premium travel improvements, discount fares under pressure.

Norwegian yields slump in Jan-2010

In Europe, Norwegian Air Shuttle’s shares slumped 6.3%, following the previous day’s 1.2% reduction, as the LCC reported 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.

Also in Europe, shares in Air Berlin slipped 1.8%, while easyJet was down 0.2% and Ryanair was up 0.7%.

US majors report first collective monthly traffic increase since May-2008

Southwest Airlines (shares down 0.4%) and Continental Airlines led the six largest US carriers to their first collective increase in monthly traffic since May-2008, in a sign that travel demand is starting to rebound.

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Selected LCCs daily share price movements (% change): 08-Feb-2010


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