SAS yield declines; Aer Lingus passenger numbers fall 7.1%; Air France-KLM load factor slips

European airline shares were down on Tuesday (07-Sep-2010), following disappointing traffic results and a decline in wider markets. The banking sector pushed markets lower for the day, after The Wall Street Journal stated bank stress tests did not provide a clear picture of government debt holdings among major banks.

In key markets, UK’s FTSE (-0.6%), Germany’s DAX (-0.6%) and France’s CAC (-1.1%) all ended the session lower.

SAS yield declines

SAS Group (-1.2%) declined after reporting a 3.4% year-on-year fall in Scandinavian Airlines’ yield for Jul-2010. However, revenue per ASK (RASK) was up 0.7% for the month, due to improved load factor.

The group stated the RASK outlook for Aug-2010 is uncertain, while yield growth for the month is expected to be negative.

Meanwhile, the carrier reported improved traffic data for Aug-2010, with load factor up 2.0 ppts, to 78.2%. This included:

Passenger numbers for the group were up 7.3%, to 2.2 million.

See related CAPA Profile: Yields

Aer Lingus passenger numbers fall 7.1%

Aer Lingus (-1.4%) also fell, after it reported a 7.1% decline in passenger numbers for Aug-2010, to 1 million. The decline was led by a 14.7% fall in long-haul passenger numbers, to 99,000, while short-haul passenger numbers were down 6.2%, to 913,000.

More positively, load factor for the month rose 2.7 ppts, as traffic (RPKs) declined 10.4% on the back of a 13.3% reduction in capacity (ASMs).

See related CAPA Profile: Traffic and Capacity

Air France-KLM load factor slips

Air France KLM (-0.7%) slipped after reporting a slight decline in load factor and passenger numbers for Aug-2010. Load factor was down 0.3% for the month, as the decline in traffic (RPKs), down 1.2%, outweighed the reduction in capacity (ASKs), down 0.9%. Passenger numbers for the period were down 0.8%, to 6.5 million. The group attributed the decline to “slightly less dynamic” leisure traffic compared to Aug-2009.

More positively, the group stated RASK continued to improve for the month and was “well up” year-on-year, while forward bookings for the coming months showed a positive trend.

British Airways' price target upgraded

Elsewhere, Britiish Airways was one of the strongest gainers for the day, after UBS raised its price target for the carrier’s shares from GBP 295 pence to GBP 335 pence, stating synergies from its merger with Iberia will boost its performance. Iberia (+3.0%) also climbed as a result.

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