Turkish Airlines reports 51% decline in net profit; SAS sets price of rights issue

The majority of European carriers’ shares were up on Tuesday, (06-Apr-2010) moving higher with the wider markets, which established fresh 2010 highs. European share markets gained on positive data from the US suggesting the country’s economy is now on a solid path to recovery. The rise in airline shares occurred despite a 0.3% increase in oil prices, to USD86.84.

In key markets, UK’s FTSE (+0.6%), France’s CAC (+0.5%) and Germany’s DAX (+0.3%) were all up at the end of trading.

Turkish Airlines reports 51% decline in net profit

Turkish Airlines (-1.9%) took one of the day’s biggest falls after the carrier reported a 51% year-on-year decline in net profit for the 12 months ended 31-Dec-2009, to EUR275.4 million. The decline was despite a 15% increase in sales revenue, to EUR3,449 million. Operating profit rose 12%, to EUR409.9 million.

In terms of traffic, the carrier reported a 11% rise in passenger numbers to 25 million. However, load factor was down 3.1 ppts, to 70.9%, as capacity rise 22%. Fleet size was increased by 4% over the year, to 132 aircraft.

SAS sets price of rights issue

SAS was meanwhile flat, after it set its USD695 million rights issue at a discounted price of SEK0.67 (USD0.09) per share. Shareholders are entitled to three subscription rights per share owned. The record date is 12-Apr-2010 and the subscription period runs from 15-Apr-2010 to 29-Apr-2010. The airline called on its shareholders in Feb-2010 to inject the sum in order to proceed with its cost-savings plan, and all three government stakeholders announced they would support the issue.

Ryanair increases FY2009-10 guidance

Ryanair (+0.1%) rose marginally after raising its after tax profit guidance the day prior for the 12 months ended 31-Mar-2010 from a previously-guided EUR275 million to “not less than EUR310 million”.

Meanwhile, during trading, the LCC announced plans to "incentivise its passengers to travel light" during the peak Summer months by increasing checked-in baggage fees for Jul-2010 and Aug-2010 to EUR20/bag, for all bookings made from 07-Apr-2010. See related report: Ryanair raises FY2010 forecast; Ryanair and Spirit increase baggage fees

Lufthansa pilots threaten to strike again

Lufthansa (+1.7%) was also up, despite its Vereinigung Cockpit pilots union renewing its threat to conduct a four-day strike next week, unless they can reach an agreement with the carrier on terms for arbitration. Lufthansa reaffirmed its threat to take the union to court unless it cancels the planned strike.

Elsewhere, British Airways (-2.3%) and Aer Lingus (-1.3%) were down, while Dart Group (+12.3%) and Aegean Airlines (+4.7%) were the day’s biggest gainers.

Europe Airline Daily offers the very latest in what’s going on in the European aviation industry. Other stories featured in today’s issue include:

  • ERA offers cautious optimism for 2010 passenger demand;
  • Aer Lingus and Aer Arann franchise, Aer Lingus Regional, commences service;
  • ITF and Unite to meet Spanish unions about British Airways/Iberia merger;
  • Warsaw Fryderyk Chopin Airport announces new services;
  • Aeroflot and Conviasa sign Memorandum of Understanding;
  • Malév achieves revenue and passenger number targets in 1Q2010.

Europe selected airlines daily share price movements (% change): 06-Apr-2010