15-Jun-2010 4:28 PM

Turkish Airlines traffic up 20.4%; EC sets antitrust deadline for British Airways/Iberia merger

European airline shares rose with the wider market on Monday (14-Jun-2010), which lifted to the highest close in a month. Markets were pushed higher by the banking and mining sectors, as investors started the week more optimistic about a global economic recovery.

During trading, Greece's Finance Ministry rejected a decision by Moody's Rating Agency to downgrade the country's sovereign rating from 'A3' to 'BA1', stating, "this downgrading in no way reflects the progress we have made in the last few months, nor the opportunities opened by our budgetary stabilisation and the improvement of our country's competitiveness". The Ministry added that its budgetary measures "showed very clearly" that Greece was meeting the requirements of the EU and IMF, which have together provided the country with a EUR110 billion bailout.

In key markets, UK’s FTSE (+0.7%), France’s CAC (+2.0%) and Germany’s DAX (+1.3%) all ended the session higher.

Turkish Airlines' traffic increases 20.4%

Turkish Airlines (+4.6%) gained after last week reporting passenger traffic between Jan-2010 and May-2010 increased 20.4% year-on-year, to 10.9 million. International passenger traffic in the period rose 19.5% to approximately 5 million. Cargo traffic rose 50.5% to 126,000 tonnes.

See related CAPA Profile: Traffic and Capacity

European Commission sets antitrust deadline for British Airways/Iberia merger

The European Commission set a provisional antitrust deadline of 15-Jul-2010 regarding the planned merger between British Airways (+3.5%) and Iberia (+2.8%). The EC is reportedly concerned the agreement may create monopolies on certain routes, including services between London and Madrid, Barcelona and Malaga. The EC is also concerned about competition on approximately 20 indirect routes and the likelihood of passengers being willing to substitute near-by airports with one another

easyJet and easyGroup commence legal hearing

easyJet (+1.9%) confirmed the court hearing to resolve the legal claim brought by easyGroup IP Licensing Limited (eGIP) over interpretation of the brand licence agreement with easyJet commenced in the High Court on 14-Jun-2010. The trial is likely to last up to 10 working days. At issue is the classification of various revenue streams to be included within the definition of easyJet's "core activity" and compliance with the "75:25 rule".

This rule provides that no less than 75% of the company's revenue is to be "derived from core activity", which relates to "the transportation of passengers in fixed wing aircraft". The 75:25 rule was designed to ensure easyJet's business remained focused on its operations as an airline. easyGroup argues that easyJet is, or might be, operating outside of the limits of the 75:25 Rule. easyJet founder, Sir Stelios Haji-Ioannou, claims the carrier is no longer an LCC due to its additional charges to passengers.

See related CAPA Profile: Ancillary Revenues

Elsewhere, Dart Group (-1.9%), Aer Lingus (-1.1%) and SAS (-1.1%) were the only carriers to decline for the day. Vueling (+6.8%) was the day’s biggest gainer.

Europe selected airlines daily share price movements (% change): 14-Jun-2010