Finnair expects 2Q2010 results to be similar to 1Q; SAS to focus on generating positive cash flow
Finnair expects 2Q2010 results to be similar to 1Q2010
Finnair (+6.5%) was one of the day's biggest gainers, after updating its previous guidance on its 2Q2010 results, projecting its operational loss for the period would be at the same level or smaller than the 1Q2010 operational loss. The carrier's earlier guidance had projected the 2Q2010 result would be "clearly worse" than the 1Q2010 figure.
The reasons for the improved financial performance are better than expected development of demand and unit revenues. The negative post-effects of the volcanic ash crisis, which disrupted air traffic in April, were milder than expected. The strong growth in demand that began in Mar-2010 continues, and a strengthening of load factors has improved unit revenues in Finnair's scheduled traffic. Demand is growing in markets outside Finland, but Finnish business travel remains subdued. Cargo traffic demand has improved significantly during the spring, reflected in tonnes carried and in unit revenues.
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SAS to focus on generating positive cash flow
SAS (+4.1%) also made a strong gain after CEO, Mats Jansson, stated the day prior that the carrier's goal is to generate positive cash flow and pay off investments with cash flow from its operations. Once it has a positive cash position, and it has reduced unit costs to the "right level", Mr Jansson feels the timing would be right for SAS to "be part of another group". SAS is 65%-70% through its USD965 million cost-cutting plan, which will take 21 aircraft out of the carrier's fleet and cut 4,600 staff. Indication of economic recovery in 2Q2010 have improved over the first quarter.
Aer Lingus reaches agreement ruling out strike action
Aer Lingus signed a legally-binding Registered Employment Agreement (REA) with SIPTU, its largest union, effectively ruling out industrial action by employees over pay and conditions set down in the agreement. The agreement will be registered by the Labour Court next week. The agreement also sets minimum pay scales that take account of cost-reduction plans and a pay freeze until the end of 2012.
See related CAPA Profile: Industrial Relations
Elsewhere, Cimber Sterling (-1.5%) and airberlin (-0.2%) were the only carriers to end trading lower, while Norwegian Air Shuttle (+7.8%) continued its recent climb.
Europe selected airlines daily share price movements (% change): 09-Jun-2010
Source: Centre for Asia Pacific Aviation,Yahoo! Finance