Ryanair, Air Berlin and Vueling surge as Europe/IMF rides to Greece’s aid

European airline shares rose yesterday, led by LCCs Vueling (+5.5%), Ryanair (+4.6%) and Air Berlin (+4.4%), as France and Germany agreed to a draft document on a financial aid package for Greece involving eurozone countries and the International Monetary Fund.

LCCs held a 22% share of capacity to/from Greece in 2009, down slightly from 2008 levels, but a massive increase from just 1.2% in 2001. This LCC penetration rate is below the EU average of 36%.

LCC capacity (seats) share to/from Greece (%): 2001 to 2009

easyJet upgraded

easyJet’s shares advanced 0.7%. Nomura Securities adjusted its forecasts for easyJet to factor in an improved revenue environment, underlying cost reductions and the deterioration of Sterling against the US dollar. The net effect is an upgrade to its 2010 profit before tax forecast from GBP140 million to GBP185 million and an increase in the broker’s valuation of the stock from GBP4.20 to GBP5.0. The broker rates easyJet's shares as "buy".

Elsewhere in Europe, Norwegian's stock rose 1%.

Selected LCCs daily share price movements (% change): 25-Mar-2010