British Airways surges with release of first half financials

Shares in British Airways surged 6.7% on Friday, upon the release of the carrier’s financial results for the six months ended 30-Sep-2009.

BA generated an operating loss of GBP111 million in the first half, compared to a GBP140 million profit in the previous corresponding period. Total costs rose 8.7% year-on-year, while revenue dropped 13.7% year-on-year in the period on a 2.8% year-on-year reduction in passenger numbers and 12.2% year-on-year reduction in revenue per RPK.

However, BA stated demand may be starting to recover, and volumes and yields appear to have stabilised, after Premium traffic fell only 1.4% year-on-year in Oct-2009, compared to 7.9% in Sep-2009. CEO, Willie Walsh stated revenues are likely to be GBP1 billion lower year-on-year in 2009 as a result, after reporting a loss before tax of GBP292 million for 1H2009/10. See separate report - British Airways biggest loss sends shares up as a glimmer of hope appears; “Permanent changes” ahead

BA now plans to cut 3,000 more jobs, in addition to the 1,900 already cut, and to cut capacity by 6% during its Winter 2009/10 schedule. BA also plans to defer the delivery of its six A380 aircraft by one year, to 2013-2016.

In BA consolidation news, Mr Walsh stated he remains confident the carrier will be able to reach a merger deal with Iberia before the end of the year. Mr Walsh added he is also confident the carrier’s proposed trans-Atlantic alliance with Iberia American Airlines will be approved by the US Department of Transport. Shares in Iberia gained 4.8% on Friday.

Aer Lingus gains as traffic stabilises

Aer Lingus’ shares rose 3.3% on Friday, on the release of the carrier’s traffic highlights for Oct-2009. The Irish carrier stabilised a decline in passenger traffic, with total passenger numbers down just 0.2% year-on-year. However, long-haul traffic declined 25.7% year-on-year in Oct-2009. Aer Lingus increased its load factor by 1.3 ppts to 74.6% for Oct-2009.

SAS shares dip on yield reduction

Shares in SAS dipped 1.3% on Friday, as the carrier announced passenger yields for Scandinavian Airlines dropped 9.4% year-on-year in Oct-2009. The Group’s passenger numbers also suffered, down 11.1% year-on-year, while Scandinavian Airlines’ passenger numbers decreased 12.3% year-on-year in Oct-2009. However, Scandinavian Airlines' passenger load factor increased 4.8 ppts to 85.4%, while the group reached a load factor of 74.3% in Oct-2009, up 4.3% year-on-year. SAS stated the “market continues to be unpredictable and the uncertainty regarding the timing of the recovery is considerable”.

Elsewhere, Lufthansa was strong (+3.0%), Finnair gained (+2.4%), Air France-KLM jumped (+1.2%), while shares in Nordic LCC, Norwegian, reduced 7.1% on Friday.

In other European finance news, Alitalia reported an operating profit of EUR15 million, compared to a EUR210 million loss in the previous corresponding period. Meanwhile, Icelandair announced it has postponed the release of its 3Q2009 financial results to Dec-2009. The carrier added revenue for the period increased 29% year-on-year while EBITDA rose 35.5%.

Norwegian meanwhile shed 7.1% on the day.

Europe selected airlines daily share price movements (% change): 06-Nov-09