Gruesome day for European shares as gloom covers markets. Norwegian loses 27% value since 16-Jun
01-Jul-2010 was not a good day for the markets, as nervousness about Euro credit, Chinese economic cooling and weak consumer spending coursed through the community's veins. The FTSE 100 index fell 1.62%, France's CAC 40 was down 2.02% and the German DAX lost 1.4%. But those losses went only part way to explaining the depth of airline share price falls, when 12 of the 21 CAPA covers fell by more than 2%.
Norwegian shares under stress
Norwegian Air Shuttle (-7.4%) again led the market down on a day when Europe's airline shares suffered from one of the more ugly days of the year. On 1-Jul-2010, all but Turkish Airlines (+1.0%) and El Al (+0.1) defied the general direction of the wider market.
From a recent high of NOK133 on 16-Jun-2010, Norwegian's share price dipped to NOK97.5 on 2-Jul-2010, continuing what has been an almost even slide for the past two weeks, shaving more than a quarter (26.6%) off the company's capitalisation.
British Airways-Iberia suffer loss
Both British Airways and erstwhile partner Iberia were also under fire yesterday as sellers drove down Iberia's shares 5.7% and British Airways' 4.9%. British Airways appears to be resolving the issue of its pension liabilities and is awaiting the response of BA inflight crews to a new proposal issued by the carrier this week. The Unite Union, which represents the cabin staff, has not made a recommendation to staff on the BA offer, but if the vote is negative, Unite says strike action could begin again by the middle of August, right in the middle of the peak holiday season.
The carriers' merger is proceeding steadily towards fruition, although the usual rumours about the difficulties in resolving pilot seniority and other issues are circulating.
Europe selected airlines daily share price movements (% change): 01-Jul-2010
Source: Centre for Asia Pacific Aviation, Yahoo! Finance & Reuters