RBS sees recovery in premium traffic for European carriers
European airline stocks gained yesterday, as the European markets closed higher and the UK’s RBS instilled investor confidence of a recovery in premium traffic.
RBS stated that while trading conditions for airlines "remain challenging” with rising fuel prices and industrial unrest, it expects “12-month rolling profitability of network airlines to bottom in 2H2009”. RBS added that “in the absence of a double-dip recession, we appear to be at the start of a cyclical recovery”. The broker expects premium volumes to recover, as economies recover and “premium yields to recover too, as secondary carriers exit long-haul markets”. LCCs could witness a reduction in revenue as the market normalises to pre-crisis trends, according to RBS.
Meanwhile, BA cabin crew union, Unite, has stated it may ballot staff for industrial action, if plans to adjust working practices go ahead in Nov-2009. BA stated it is not making any changes that require negotiations with Unite, as contractual changes will only be made for new recruits, not existing members.
Europe selected airlines daily share price movements (% change): 12-Oct-09