Lufthansa confident of meeting 2010 earnings goals; Iberia expected to report EUR7m net profit
European airline shares continued to decline on Wednesday (25-Aug-2010) as wider markets crashed to a five-week closing low. Markets were down on more disappointing economic data from the US and news Ireland's credit rating was cut by Standard and Poor's.
In key markets, UK's FTSE (-0.8%), Germany's DAX (-0.6%) and France's CAC (-1.2%) all ended lower for another day.
Lufthansa confident of meeting 2010 earnings goals
Lufthansa (-0.8%) slipped despite confirming it is confident of meeting its 2010 earnings goals, with some units exceeding forecasts. The carrier expects to exceed the EUR130 million operating profit earned in 2009. Load factors from the carrier's main hub at Frankfurt are currently at record levels for European traffic.
The carrier also stated during trading that it expects international and intercontinental mergers in the aviation industry will continue as part of a drive to ensure better financial performance. CEO Group Airlines and Corporate Human Resources, Stefan Lauer, commented that the "trend toward consolidation will become more intercontinental in the next years than is currently the case. It remains an exciting topic".
See related CAPA profile: Mergers and Consolidation
Iberia expected to report EUR7m net profit
Iberia (-3.0%) was also down, ahead of reporting its 2Q2010 financial results on the 27-Aug-2010. In a survey of four Dow Jones analysts, they on average expect the carrier to report a net profit of EUR7 million for the period, compared to a net loss of EUR72.8 million in the previous corresponding period. Revenue is meanwhile expected to reach EUR1,350 million, a 26% year-on-year improvement. The analysts stated a pick-up in demand has helped the carrier recover from its losses.
Air France to deploy A380 on Tokyo route
Air France-KLM (-1.7%) confirmed plans during trading to launch Paris-Tokyo A380 operations, effective 01-Sep-2010. Japan will be the first country in Asia to be served by Air France A380s, which already operates to New York and Johannesburg. From 03-Oct-2010, Air France's Tokyo service will be operated exclusively by B777-300ERs and A380s.
The carrier also this week expressed interest in resuming services to Tripoli.
See related report: Air France renews interest in Tripoli services as Libya's political past still casts a shadow
See related CAPA profile: Route Changes
Elsewhere, Finnair (+0.7%) and Air Berlin (+0.6%) were among the few airlines to rise marginally for the day, while Nordic LCCs, Cimber Sterling (-6.4%) and Norwegian Air Shuttle (-4.6%) plummeted as the Copenhagen and Oslo stock exchanges fell 1.9% and 0.7%, respectively.
Europe selected airlines daily share price movements (% change): 25-Aug-2010
Source: Centre for Asia Pacific Aviation, Yahoo! Finance & Reuters