Norwegian expands commercial agreement, Dart Group profits up; airberlin to reduce capacity

Norwegian Air Shuttle (+10.7%) led the surge in European airlines shares on Thursday (18-Nov-2010) after announcing it has partnered with Star Tour/Fritidsresor/TUI Nordic Finnmatkat to widen the scope of the agreement for the transportation of Star Tour/Fritidsresor/TUI Nordic Finnmatkat customers entered into on 14-Jan-2010.

The agreement now also includes the summer season 2011 with an additional 800 services with an approximate additional contract value of USD53 million (NOK 320 million). The full agreement now comprises 1100 services operated by B737-800s with a contract value of USD82 million (NOK490 million).

Dart Group (+5.3%) also gained after reporting a 39.0% year-on-year improvement in net profit, to GBP28.0 million, for the six months ended 30-Sep-2010. Operating profit also rose for the period, up 40.0% to GBP38.9 million. The result was on a 25.0% increase in revenue, to GBP340.4 million. Dart Group Chairman Philip Meeson stated the performance “outperformed our expectations”.

easyJet (+1.4%) also rose after Nomura increased its price target to GBP 600 pence and reiterated its ‘Buy’ rating for the LCC’s shares. The analysts stated easyJet’s move to target business passengers will allow it to reach its target of a profit per seat of GBP5 by 2013. The analysts forecast yield will increase 2.7% for easyJet in 2013 with the move.

airberlin (-1.5%) was among the few carriers which declined for the session after announcing plans to withdraw seven aircraft from service and cut capacity by 5%, in response to the decision by the German Government to implement a new tax on air travel. The carrier had earlier planned to increase capacity in 2010. It still expects 2010 earnings and revenue to increase, as air traffic recovers. airberlin estimates the tax will cost it EUR160 million-170 million. The tax will come into effect from 01-Jan-2011.

Europe selected airlines daily share price movements (% change): 18-Nov-2010