Turkish Airlines to launch new carrier; Air France-KLM expecting losses of EUR30m from snow
Turkish Airlines (+2.9%) was the biggest gainer as the majority of European airline shares rose for Tuesday (21-Dec-2010). During the day it was reported that the carrier signed an MoU with the Turkish Republic of Northern Cyprus (TRNC) and 10 other companies to launch a new national carrier in the Turkish-controlled region of Cyprus.
A 30% portion of the carrier will be state-owned, while Turkish Airlines will hold 10%. The remaining 60% will be owned by private investors. TRNC will have one seat on the new carrier’s executive board. Turkish Airlines will contribute four members, with another two elected by other investors. After the first five years shareholders will be represented in the executive board in proportion with their shares. The new carrier plans to launch in 2011 with three aircraft. A fourth will be added in 2012. Initial capital investment will be USD15 million.
See related CAPA Profile: Start-up Airlines
Air France-KLM (+1.8%) was also among the gainers, despite President Pierre-Henri Gourgeon estimated disruptions caused by the adverse snow conditions in Europe over the weekend have cost the carrier EUR15-20 million, while losses for Dec-2010 could total EUR35 million. The carrier’s shares were boosted by a 1.1% rise in France’s CAC index.
See related CAPA Profile: Outlook, Forecasts, Guidance
El Al, Cimber Sterling and Aer Lingus down
El Al (-3.5%) and Cimber Sterling (-2.3%) led the decliners of the session. Aer Lingus (-2.0%) was also down after the carrier made a once-off cash payment of EUR25.3 million to the Aer Lingus Employee Share Ownership Trust (ESOT). This transaction has fully extinguished the ESOT’s borrowings and, with it, the group’s obligation to pay any further share of profits to the trust.
Europe selected airlines daily share price movements (% change): 21-Dec-2010