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Finnair reports 23% rise in unit passenger revenue; Aer Lingus load factor up

Analysis

European airline shares were mostly down on Thursday (07-Oct-2010) despite a relatively flat wider market and a 1.9% decline in fuel prices, to USD81.67. Trading in European markets was mixed after the UK reported a record decline in house prices but the US reported an unexpected drop in initial US jobless claims.

Summary
  • European airline shares mostly down despite a decline in fuel prices and mixed trading in European markets.
  • Finnair reports a 23% rise in unit passenger revenue, attributed to increased business travel demand in markets outside Finland.
  • Aer Lingus shows improvement in load factor, with a 3.5 ppt increase to 81%.
  • Norwegian experiences a decline in revenue per ASK and yield, despite a rise in passenger numbers.
  • Dart Group and Cimber Sterling shares decline, while Aegean Airlines shares increase.
  • Overall, the European airline market shows mixed performance with some carriers experiencing positive results and others facing challenges.

In key markets, UK's FTSE (-0.3%) slipped for the day, while Germany's DAX (+0.2%) and France's CAC (+0.2%) made minor gains.

Finnair reports 23% rise in unit passenger revenue

Finnair (+5.7%) was the biggest climber of the day, after stating unit passenger revenue rose by just over 23% year-on-year in Sep-2010. The carrier attributed the improvement to a rise in business travel demand in markets outside Finland.

See related CAPA Profile: Yields

The carrier reported a 1.9 ppt decline in load factor for the month, to 74.9%, after loads in all markets fell. However, passenger numbers were up 1.4% for the period to 652,300. All markets witnessed a rise in passenger numbers, expect for trans-Atlantic operations, in which numbers were down 14.3% to 13,300.

Aer Lingus load factor up

Aer Lingus (+1.4%) also gained for the day after reporting a 3.5 ppt improvement in load factor for Sep-2010 to 81%. The result was boosted by a 10.2 ppt rise in long-haul load factor, to 81.8%. Domestic load factor slipped 0.2 ppts to 80.6%.

Passenger numbers for the month declined 3.4%, to 927,000, led by a 3.4% decline in short-haul passenger numbers. Long haul numbers were stable, at 841,000.

See related CAPA Profile: Traffic and Capacity

Norwegian RASK declines

Norwegian (-4.9%) slumped after reporting a 21% decline in revenue per ASK for Sep-2010, to EUR5.23 cents. Yield was down 19% for the month to EUR6.85 cents. The result was despite a 20% rise in passenger numbers to 1.2 million. Load factor was stable.

Elsewhere, Dart Group (-4.1%) and Cimber Sterling (-3.0%) were also down for the day, while Aegean Airlines (+1.8%) was up.

Europe selected airlines daily share price movements (% change): 07-Oct-2010

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