Aer Lingus commences implementation of cost cutting plan; SAS expecting loss of EUR102.6 million
Also during trading, data showed the UK GDP grew an upwardly revised 0.4% in 4Q2009, showing the economy exited recession in the last months of the year. However, UK’s FTSE (-0.7%) still ended trading down.
France’s 4Q2009 GDP results also showed the economy growing during the period, expanding 0.6% for the quarter, after a 0.2% increase in 3Q2009. France’s CAC (-0.3%) was down at the end of trading and Germany’s DAX (-0.2%) also slipped.
Aer Lingus commences implementation of cost cutting plan
Aer Lingus (+4.2%) gained after confirming it has commenced the implementation of its EUR97 million cost-cutting plans, commenting that it has "started the process of improving yields while implementing the necessary cost reduction programme". The carrier stated it has "limited visibility at the moment over the second half of 2010", adding, "all our primary markets remain in recession, in particular the group's core Irish market". However, it reiterated that it would return to profit as soon as the Irish economy recovers.
During trading, the carrier reported a net loss after tax of EUR130.1 million for the 12 months ended 31-Dec-2009, compared to a loss of EUR109.9 million in the previous corresponding period. Operating losses widened, with the carrier reporting a loss before exceptional items of EUR81.0 million, compared to a loss of EUR20 million in the previous corresponding period.
Average fare yield was also down 16.8% for the period, to EUR95.62, led by a decline in long-haul yield.
SAS expecting loss of EUR102.6 million
SAS was also up, despite forecasting during trading a 1Q2009 loss of EUR102.6 million due to weak demand and negative effects from currency exchange rates. The carrier stated the projection is in line with internal forecasts and its USD1.4 billion cost-cutting programme aimed at making it profitable by 2011, is also on schedule. The airline also said the conditions from the four main owners to participate in the rights issue have been satisfied.
British Airways enters final day of strike action
British Airways (-2.4%) was meanwhile the day’s biggest loser, as cabin crew held their final day of strike action. The carrier and union, Unite, are still yet to reach an agreement, with the Trades Union Congress stating both sides are no closer to resuming negotiations, despite both claiming to be open to talks. Unite has now threatened to launch further strike action, if BA does not present a suitable offer, which must include the return of travel concessions. The carrier removed the concessions from all staff who participated in the strike last week.
Europe Airline Daily is an efficient morning briefing on European airline developments. Covering fleets, routes, financials, traffic, bilateral agreements, alliances, financing, ownership, along with analysis of all significant developments. Other stories available in today’s issue include:
- EU updates the list of airlines banned from the European airspace;
- bmi invites British Airways frequent flyer members to join its programme;
- Ryanair opens 37th base at Oslo Rygge Airport;
- Helvetic Airways to increase capacity by 50% in May/Jun-2010;
- Air France takes delivery of 63rd A320 aircraft;
- Sun Air to close Aalborg-Oslo route;
- LOT Polish Airlines planning to introduce new cost reduction scheme in Apr-2010.
Europe selected airlines daily share price movements (% change): 30-Mar-2010