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Europe airline stocks continue strong start for New Year – Share Wrap

European airline stocks continued to climb yesterday - the second day of full trade in 2010. The London FTSE 100 gained 0.40%, the Paris CAC Index rose 0.22%, while Frankfurt DAX was positive 0.12%.

Shares in British Airways (+3.6%), Austrian Airlines (+2.9%) and Turkish Airlines (+0.9%) were among the gains.

Aer Lingus’ shares rose 4.7% on Tuesday, despite a 0.8% loss on the Dublin Iseq. Aer Lingus and Aer Arann reportedly announced further talks regarding a proposal for commercial agreement, involving Aer Arann operating a feeder service from destinations in the UK to Aer Lingus’ bases in Dublin and Cork.

Lufthansa faces threat of industrial action

Vereingung Cockpit Union reportedly plans to ballot its members employed by Lufthansa next week on possible industrial action over pay and job security. The union, which represents approximately 4,500 Lufthansa pilots, expects strong approval among its members for industrial action. Shares in the German carrier gained 1.2% yesterday. See related report: Global airline outlook: Industrial action the big threat to aviation in 2010

Elsewhere Iberia, which rose 2.3% yesterday, announced plans to increase frequency to Lima and Buenos Aires, following the collapse of Air Comet. Before its demise, Air Comet operated five times weekly Madrid-Lima and Madrid-Buenos Aires services.

Meanwhile, shares in Air France-KLM dipped (-0.2%), Finnair and Aegean Airlines were also weaker, down 1.4% each.

Europe selected airlines daily share price movements (% change): 05-Jan-2010