Austrian Airlines rebounds, Lufthansa, Air France-KLM and British Airways gain
Shares in Austrian Airlines rose 7.6% yesterday as the Supervisory Board stated that if the takeover bid by Lufthansa fails, the carrier will require a bailout of approximately EUR1 billion from Austrian Government. Chairman of Supervisory Board, Peter Michaelis, has positive sentiment towards the takeover proceeding.
Elsewhere, British Airways’ shares gained 1.2%, as investors welcomed an announcement at the carrier’s AGM that it plans to conduct a convertible bond issue to raise capital, rather than a rights issue. Investors welcome a boost in the carrier’s finances amid prevailing economic conditions and little sign of a recovery in premium traffic.
British Airways CEO, Wille Walsh, told Reuters the “reality is that the airline industry is facing, I think, the most challenging period it has ever faced…Liquidity is an important issue in the current environment. We are focused on cash…I do not think it will get back to the peaks [in premium travel] we saw in 2007 but I do believe long-haul premium, will recover in time. With short-haul premium I do not believe we will see a recovery in volumes. I think that has been in decline for some years and that will continue to decline.”
Europe selected airlines daily share price movements (% change): 14-Jul-09