16-Feb-2010 4:20 PM

British Airways and Iberia shares gain from DOT approval; Finnair eases

The majority of European airline shares were up on Monday (15-Feb-2010), after the US Department of Transportation (DOT) recommended antitrust approval of an alliance between British Airways, American Airlines, Iberia, Royal Jordanian and Finnair. Another drop in oil prices (-2.0%), to USD73.05, also encouraged airline investors.

The increase in airline share prices pushed wider markets to their fifth gain in six sessions. Also boosting markets was gains in the mining sector, after Rio Tinto Group shares received recommendations from both Credit Suisse Group AG and BofA-Merrill Lynch Global Research.

In key markets, UK’s FTSE (+0.5%), France’s CAC (+0.3%) and Germany’s DAX (+0.2%) were all up at the end of trading.

British Airways and Iberia shares gain from DOT approval; Finnair not so fortunate

British Airways (+2.6%) and Iberia (+3.2%) were two of the day’s biggest gainers after the US DOT announcement over the weekend. However, Finnair (-2.6%) gave up some of Friday's gains.

According to Bloomberg, British Airways is expected to earn approximately GBP150 million from the sale of four pairs of landing slots at London Heathrow Airport - a DOT condition in the final approval of antitrust immunity.

In other Iberia news, the carrier has reportedly put plans to launch a domestic and medium-haul LCC subsidiary on hold, due to current negotiations to merge with British Airways. Vueling (+2.5%) shares rose as a result.

TUI Travel reports loss for three months ended 31-Dec-2009

TUI Travel (-0.7%) reported an underlying EBITA loss of EUR163.6 million for the three months ended 31-Dec-2009, compared to a loss of EUR69 million in the corresponding period last year. The loss came as revenue for the quarter fell 15% year-on-year, to EUR2,933 million.

TUI Group attributed the loss to a decline in volumes in all source markets due to the global financial downturn. The group added the development of French airline, Corsair, affected earnings.

Elsewhere, Eurofly (+12.4%) and Dart Group (+10.8%) made the largest gains of the day, while SAS (-5.5%) and Ryanair (-1.5%) shares fell. Ryanair plans to enter discussions with Irish Tánaiste, Mary Coughlan, over the LCC’s request to open a new maintenance operation at Dublin Airport.

Other stories appearing in today’s Europe Airline Daily include:

British Airways to operate sustainable jet fuel plant from 2014;
CityJet announces new CityPlus product;
easyJet to expand Israel and Serbian services;
Shareholders battle over Blue Wings' bankruptcy;
Ilyushin Finance Co yet to make financial decision on feasibility of plans to launch an IPO.

Europe selected airlines daily share price movements (% change): 15-Feb-2010