Aer Lingus defends Ryanair hostilities - European share price wrap


Aer Lingus has mounted a strong defence against Ryanair's EUR748 million takeover offer, stating it expects to be profitable in 2008 and beyond and announcing the resumption of Shannon-London Heathrow services. Restoring the Heathrow link will help win hearts and minds in the Irish Government, but much more work needs to be done by the Irish flag carrier in the coming weeks to convince the government not to sell its shareholding.

Investors seemed pleased Aer Lingus has found a way of being profitable again, despite only recently foreshadowing a very gloomy outlook, sending the shares up 4.2% yesterday. Ryanair shares advanced 1.2%.

SAS, fresh from raising some beer money from its stakes in airBaltic and Spanair, advanced 5.9% yesterday, as investors warm to the prospect that a streamlined SAS could be more attractive to Lufthansa.

The SAS suitor has set a final (slightly higher) price for Austrian, with both carriers' shares rising yesterday (+1.8% and +3.8%, respectively). The German carrier remains likely to have another look at SAS, although the Scandinavian's debt load may need to be cleared up as well.

Air Berlin meanwhile fell back into the atmosphere (shares down 6.6% yesterday) - after hitting the stratosphere on Monday on rumours Etihad (the UAE-based airline that could buy virtually airline on the planet) was interested in Germany's number two carrier.

European selected airlines daily share price movements (% change): 22-Dec-08

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