Aeroflot recovers funds; Iberia traffic up on long-haul focus; Thomas Cook acquisition approved
- Aeroflot recovers USD52 million of embezzled funds, resulting in a 2.9% increase in share value.
- Rosavia Airlines files for bankruptcy, transferring assets to Aeroflot.
- Iberia reports a 3.1 ppt improvement in load factor for August 2010, driven by a focus on long-haul routes.
- Thomas Cook's acquisition of Öger Tours is approved by the European Commission, while TUI Travel's stock is downgraded.
- Eurofly and Cimber Sterling experience share price gains, while Aer Lingus and SAS see a decline.
- Overall, European airline shares have mixed performance in a day of choppy trading.
Aeroflot recovers funds
Aeroflot (+2.9%) made one of the day's biggest gains after Aeroflot confirmed it has recovered USD52 million of funds embezzled from the carrier. The funds were transferred from Swiss bank accounts frozen at the request of Russian authorities in 1999.
Rosavia Airlines meanwhile filed a bankruptcy statement with the Moscow Court of Arbitration. The company is owned by Russian Technologies Corporation. It was formed by combining the assets of STC Russia, Kavminvodyavia, Orenburg Airlines, Vladivostokavia, Saratov Airlines and Sakhalin Airways. Aeroflot and Russian Technologies Corporation signed an agreement in Feb-2010 to transfer the assets of the carrier to Aeroflot.
Iberia traffic up on long-haul focus
Iberia (+0.1%) made a slight gain after reporting a 3.1 ppt year-on-year improvement in load factor for Aug-2010, to 85.5%. The increase was the result of a 7.5% rise in traffic (RPKs) on a 3.6% increase in capacity (ASKs).
The rise in traffic came as a result of the carrier's policy to cut back on short to medium haul services and increase long haul routes. Long haul traffic rose 14.9% as a result, while domestic traffic was down 4.8% and medium haul down 4.1%.
Iberia stated unit revenue per available seat kilometre (ASK) continued to improve on the previous year, despite the average stage length rose by 10.1%. This improvement was due to the significant increase in the load factor and yields in long-haul flights. Business Plus passengers continued to improve, leading to a rise in yields.
See related CAPA Profile: Yields
Thomas Cook acquisition of tour operator approved; TUI falls
Thomas Cook was flat, despite the European Commission approving the proposed acquisition of German tour operator Öger Tours by the group, under EU merger regulations. The Commission concluded that the proposed transaction will not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it. Thomas Cook plans to acquire the whole of Öger Tours except its wholly owned subsidiary, O&R Werbeagentur, and its minority share in Holiday Plan Turizm Isletmecilik ve Ticaret Anonim Sirketi, a Turkish company. The proposed transaction will result in horizontal and vertical overlaps, in the leisure travel sector, in particular in Germany.
See related CAPA Profile: Mergers and Consolidation
TUI Travel (-1.9%) meanwhile declined, after BA-Merrill Lynch downgraded the company's stock from 'Buy' to 'Neutral'.
Elsewhere, Eurofly (+3.1%) and Cimber Sterling (+1.5%) gained for the day, while Aer Lingus (+3.0%) and SAS (-2.9%) were down.
Europe selected airlines daily share price movements (% change): 14-Sep-2010
Source: Centre for Asia Pacific Aviation, Yahoo! Finance & Reuters