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UPDATE: Europe Airlines Show July Traffic Rise |
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| Thursday August 7th, 2008 / 12h28 |
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(Combines results.)
By Steve McGrath Of DOW JONES NEWSWIRES LONDON -(Dow Jones)- Higher July traffic figures from some of Europe's major airlines Thursday suggest that there is a lagged effect on bookings from the economic slowdown in the region, analysts say.
Air France-KLM (3112.FR), the world's biggest airline by revenue, major low-cost carrier easyJet PLC (EZJ.LN) and Irish carrier Aer Lingus (EIL1.DB) all reported higher traffic in July, even though they were filling proportionally less of the higher capacity they were flying.
"Peak summer travel was expected to be strong, due to the lagged effect of economic slowdown on bookings. The data coming through from the sector confirms this," Collins Stewart said in note to investors.
Airlines, already seeing earnings drop sharply due to sky-high jet fuel prices, are preparing for a downturn in bookings this winter due to a weakening economy by trimming their capacity plans.
But for now, traffic is still increasing for many airlines. French-Dutch airline Air France-KLM (3112.FR) said Thursday that its traffic, measured in revenue passenger kilometers, increased 1.8% in July compared with a year earlier, although load factor, a measure of how full its planes are - dropped 1.8 percentage point to 84.4% due to a 3.9% rise in capacity. The total number of passengers carried dropped 0.3% to 7.14 million.
British low-cost carrier easyJet, meanwhile, reported that passenger numbers rose 20% on the year in July to 4.47 million and load factor rose to 89.3%, from 88.6%. Aer Lingus said it carried 8.1% more passengers on the year in July, although load factor dropped to 83.3% from 84%, as more seats filled on its short-haul planes failed to offset a bigger drop in long-haul load factor.
Earlier this week, Europe's largest low-cost carrier, Ryanair Holdings PLC (RYA.DB) reported a 19% rise in passenger numbers in July to 5.66 million, but its average load factor fell one percentage point to 89%. Thursday, the carrier said it would cut average fares by 5% this fall to help demand.
The worst hit of Europe's major carriers so far has been British Airways PLC (BAY.LN), which said traffic fell for a third consecutive month in July, and that proportionately it filled fewer seats. The airline, which relies on lucrative long-haul and business customers for its profits, blamed high oil prices and the weakening economy for the falls.
Collins Stewart said corporate travel manager Hogg Robinson - which manages in excess of $10 billion of corporate travel on behalf of clients - had told it that demand is softening and companies are tightening travel policies by restricting premium short-haul flights and restricting taxi use.
Nordic airline SAS AB (SAS.SK), which has been badly hit in recent years by soaring costs, tough competition on its long-haul routes and strikes by staff, said traffic in RPK's rose 2.7% in July, but load factor fell 1.7 percentage points to 78.9% because capacity was up 4.9%. It carried 3.5 million passengers in July, down 0.3%
It said it is seeing relatively good demand and passenger growth, although "uncertainties remain regarding the future macroeconomic development as well as the competitive situation."
KEY EUROPEAN AIRLINE JULY TRAFFIC:
AIRLINE RPKs Chg On Yr PASSENGER NOS Chg British Airways 10.0Bln -3.5% 3.0M -3% Ryanair n/a n/a 5.66M +19% Air Berlin n/a n/a 2.91M -1.4% SAS 4.16B +2.7% 3.55M -0.3% EasyJet n/a n/a 4.47M +20% Aer Lingus 1.72B +8.1% 1.03M +8.1% Air France-KLM 20.1B +1.8% 7.14B -0.3% Alitalia Due Aug Lufthansa Due Aug 11 Iberia Due Aug 12 -By Steve McGrath, Dow Jones Newswires; 44-20-7842-9284; steve.mcgrath@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=2wyYaVwLOIgDkadHhfCsKQ%3D%3D. You can use this link on the day this article is published and the following day.
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| Thursday August 7th, 2008 / 12h28 |
Source : Dowjones Business News |
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