LCC stocks mostly rise: Ryanair and AirAsia rise, easyJet and Southwest also up, Air Berlin eases
Also in Europe, SkyEurope shares jumped 17.7%, following a 13.3% gain on Tuesday, regaining most of Monday’s 34.8% share price slump, as investors cling to hopes that SkyEurope can pull out of ‘creditor protection’ as a new, improved airline.
Meanwhile, Ryanair shares gained 5.5%. Europe’s largest LCC remains intently focused on reducing all ‘unnecessary’ costs, most recently stating it plans to remove checked luggage options from the Northern Spring 2009, to minimise baggage processing and to save the LCC an estimated EUR20 million p/a. The carrier has also confirmed plans to freeze growth at its nine UK bases with immediate effect, ostensibly due to the UK Government’s Air Passenger Duty and BAA’s high airport charges - but most probably due to crumbling demand as the UK recession bites.
AirAsia announced plans to abolish the administration fee from its fare structure to further stimulate travel demand, but costing the carrier an estimated USD114 million. Investors shrugged off the revenue implications, sending its shares up 5.5% yesterday. AirAsia stated its current focus is to build passenger traffic, with CEO, Tony Fernandes, stating “any product that can reduce cost will make more profit”.
Selected LCCs daily share price movements (% change): 24-Jun-09