SAS shares fly as rights issue pleases investors. Finnair job reductions not so pleasing.
Scandinavian Airlines' shares bounced 15.5% up as investors rushed to gain the right to purchase a low priced share-for-share in the issue announced on Friday. There was a double whammy for the stock, as Lufthansa hinted at continued interest in buying into SAS.
Fellow Nordic carrier, Finnair (-7.4%), did not fare so well, following the carrier's announcement of enforced temporary leave without pay for its pilots and for its catering arm over coming weeks. Perhaps the market was concerned that the outcome would be industrial disputes, as employees have already voted not to accept pay reductions in order to reduce the carrier's cost base.
Austrian also benefited from the European Commission's expected approval of Lufthansa's acquisition of the smaller carrier.
European airlines daily share price movements (% change): 13-Mar-09
The rise in SAS' share price helps retrieve some lost ground, but, once the market has digested the news more carefully and viewed the low issue price of the new shares, Monday's move is likely to be downwards again off this increase.
Scandinavian Airlines share price: 02-Jan-09 to 13-Mar-09