11-May-2010 12:05 PM

European airline and airport stocks soar on aggressive rescue fund

European aviation stocks soared yesterday as relieved investors welcomed the move by eurozone economies and the IMF to create an almost USD1 trillion rescue fund to prevent Greece’s sovereign debt crisis from spreading.

Airlines big and small recovered considerable ground yesterday, led by Eurofly (+16.5%), Jet2.com parent Dart Group (+9.7%), Aer Lingus (+9.2%), Cimber Sterling (+7.5%), Turkish Airlines (+7.4%), Vueling (+7.3%), easyJet (+7.3%) and Iberia (+7.2%). Finnair, El Al and Lufthansa made the day’s smallest gains, but still rose 3.2%, 3.3% and 3.4%, respectively.

Air France-KLM reports EUR35m per day impact from airspace closures

Air France-KLM gained 6.3% as the airline released its traffic highlights for Apr-2010.

The carrier stated that activity during the month “saw three phases", noting that up until the ash crisis, "traffic continued the positive trend of the previous month, with a 1.1% rise for capacity down by 1.4%. Unit revenue per available seat kilometre (RASK) excluding currency was strongly up on a year earlier. Traffic collapsed during the seven days of the crisis…however, despite this significant disruption, RASK excluding currency impact was up on last year”. The airline added that forward bookings for the next few weeks are “showing a positive trend”.

Air France-KLM Group’s passenger numbers were down 20.3% year-on-year last month to 5.0 million. The carrier estimates the net impact on operating income of EUR35 million per day of completely suspended operations.

Europe selected airlines daily share price movements (% change): 10-May-2010

Airport and construction stocks take off

European airport stocks also advanced strongly yesterday, led by construction giants (and airport investors) Ferrovial (+14.0%), Abertis (+9.0%) and Hochtief (+7.8%). The operators of Vienna, Venice, Rome, Frankfurt, Paris and Copenhagen airports gained 4% to 7% yesterday.

Ferrovial unit BAA reported traffic highlights for Apr-2010, dramatically underscoring the impact of the Ash cloud crisis last month:

BAA passenger numbers: 6.9 million, -22.7% year-on-year;
- London Heathrow: 4.4 million, -20.8%;
- London Stansted: 1.2 million, -24.4%;
Cargo volume: 117,782 tonnes, +6.2%;
- Heathrow: 100,477, tonnes, +7.8%;
- Stansted: 13,704, tonnes, -7.6%;
Aircraft movements: 61,652, -21%;
- Heathrow: 31,098, -19.7%;
- Stansted: 9,804, -22.2%.

Selected airports daily share price movements (% change): 10-May-2010