Norwegian Air Shuttle and easyJet shares gain on traffic growth


Norwegian Air Shuttle’s shares gained 5.6% yesterday, outpacing its LCC peers in the European market, and peaking at a five-month high, as the carrier reported a 30% increase in passenger numbers, to 1.0 million in the month.

The increase in passenger numbers, traffic (RPKs up 38%) and capacity (ASKs up 34%), was related to the Group’s expansion in established markets and to the introduction of new routes from Apr-2009 to Mar-2010, as well as adjustments to production capacity.

Also during the month, the LCC reported an 11% year-on-year reduction in yield and an 8% reduction in revenue per ASK (RASK). The yield profile reflected an adjusted route portfolio and the introduction of new aircraft with higher capacity and lower unit cost. Norwegian stated the yield reduction was also partially offset by load factor increases (+3 ppts to 78%) in the month. The year-on-year yield and load factor development was, however, positively affected by the Easter holiday.

Shares in easyJet also gained yesterday, rising 0.7%, as the carrier reported a 13.5% year-on-year increase in passenger numbers, to 4.0 million, with an average load factor of 87.5% (+2.8 ppts). This compares with 5.3 million passengers in the month for Ryanair (+13%), with a load factor of 79% (+2 ppts), and 2.4 million passengers for Air Berlin (+4.8%) with a load factor of 72.3% (+1.7 ppts).

In the 12 months to Mar-2010, easyJet handled a notable 19.3 million fewer passengers than Ryanair (which handled 66.5 million, compared to easyJet’s 47.2 million). However, easyJet’s load factor in the 12-month period was 7.4 ppts higher than Ryanair’s. Ryanair’s shares gained 1.4% yesterday.

Selected LCCs daily share price movements (% change): 08-Apr-2010

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