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Low Cost Airline News - Europe.

Feb 11, 2008

Spanish LCCs reported a 57.4% increase in passengers last year, four times better than the market average, a research note (based on AENA data) released yesterday by Clickair revealed. But capacity is outpacing demand. Unused LCC capacity reached nearly 10 million seats last year, the report shows, noting that the capacity/demand imbalance resulted in falling load factors, particularly at the top four LCCs operating in Spain (Ryanair, easyJet, Vueling and Clickair). Average load factor of those carriers dropped 2.9 points last year to 74.7% compared to an average market decline of 1.8 points. Feb 6, 2008

Clickair

Clickair will commence daily Bilbao-London Gatwick March 30 aboard an Airbus A320. The Barcelona-based LCC is taking over the route from Iberia. Feb 10, 2008

Clickair

Clickair CEO Alex Cruz declined to comment publicly on rumors that his carrier has launched merger negotiations with Vueling Airlines. Rumors of a tie-up between the two Barcelona-based LCCs are not new but gained momentum this week after Inversiones Hemisferio, Vueling's largest shareholder, claimed it was talking with various airliness including Clickair. Feb 6, 2008

Clickair, Vueling

Both Clickair and Vueling have conceded that their financial performance has suffered owing to competitive pressure, and Cruz recently warned that some "airlines here might go down" if fares do not increase. In October, Vueling confirmed one-year deferrals on deliveries of six aircraft, now scheduled to arrive in 2009, plus cancellation of three additional deliveries. Clickair followed suit and said it will scale down its planned fleet expansion and add only two new aircraft this year instead of the planned seven. Feb 6, 2008

EasyJet

EasyJet stays on target with 14.1% revenue gain. EasyJet reported revenue of u418 million ($820.1 million) in the fiscal first quarter ended Dec. 31, up 14.1% from the year-ago period, it said in a mid-semester management update released yesterday as it maintained its full-year guidance of a 20% increase in pre-tax earnings. Feb 10, 2008

EasyJet

British low-cost airline EasyJet reported a 0.5 percent rise in first quarter revenue per seat on Thursday and reiterated its forecast for a 20 percent rise in full-year pre-tax profit. The firm also reported a 14.1 percent rise in first quarter total revenue to GBP418 million pounds (USD$820.4 million) and said second quarter revenue would be ahead of its original expectations due to increased checked bag charges and the stronger euro. Feb 7, 2008

EasyJet

EasyJet, which reported a 48 percent jump in annual profit in November, expects its growth rate to slow to 20 percent in the year to end-September, while Ryanair cautioned profits could fall by as much as 50 percent. EasyJet, which saw December-quarter passenger numbers rising by 12.4 percent to 9.1 million, said January passenger numbers grew 7.3 percent. EasyJet said the impact of GB Airways, which it bought late last year, would be a pre-tax loss of around GBP7 million pounds in the first half, due to increased marketing spend. Feb 7, 2008

EasyJet

EasyJet's outlook contrasts with that of bigger rival Ryanair, which warned on Monday there was a "significant chance" its profits would fall in the 2008/09 business year due to high oil prices, weaker sterling and low consumer confidence. EasyJet said first-half pre-tax margins would fall by 2-3 percentage points on increased fuel costs and crew costs running ahead of its original expectations. Budget airlines, which have increased market share throughout Europe by leveraging their very low cost bases to cut ticket prices, face weakening profitability on high fuel costs. Load factor, the proportion of available seats sold, fell by 2.9 percentage points to 72 percent in January, although forward bookings for February and March showed an improving trend. Feb 7, 2008

Norwegian

Norwegian will add a third Boeing 737 at its Warsaw base in June to support the launch of five new routes and an increase in frequencies on five existing routes. It will operate 22 routes out of Poland this summer including the following new services: Warsaw to Oslo Rygge (thrice-weekly), Trondheim (twice-weekly) and Split (weekly); twice-weekly Wroclaw-Oslo; twice-weekly Krakow-Stavanger. Feb 5, 2008

Norwegian Air

Budget airline Norwegian Air Shuttle on Thursday reported a rise in traffic volume in January. Norwegian carried 503,646 passengers in the month, up 20 percent from a year earlier, while its yield -- an indicator of average fares -- fell 16 percent. Total passenger traffic (RPK) rose 37 percent from the same period last year, the company, a low-cost rival to Scandinavian airline SAS said. "The increase in passenger traffic, production and passenger is related to the company's expansion in well-established markets and to the introduction of new routes from February 2007 to January 2008," the company said in a statement. Norwegian estimated its yield, or average revenue per passenger carried and kilometre flown, fell to 0.55 Norwegian kroner. In December, the yield was estimated at 0.60 kroner. International passenger traffic increased by 52 percent and international capacity increased 40 percent, producing a passenger load factor of 75 percent, up 6 percent from the same period last year. Domestic passenger traffic increased 8 percent, while domestic capacity rose 9 percent, resulting in a passenger load factor of 74 percent, steady from last year. Feb 7, 2008

Ryanair

Sarkozy and Bruni sued Ryanair over the advertisement for cut price tickets published in Le Parisien newspaper last week, featuring a photo of the smiling pair. The advertisement showed a cartoon bubble above Bruni, the scion of an Italian industrial dynasty, reading: "With Ryanair, my whole family can come to my wedding." The French president and the Italian-born model and singer were married in a small ceremony in the Elysee Palace at the weekend, setting the seal on a romance that has fascinated the world's press since it was revealed two months ago. Feb 5, 2008

Ryanair

Sarkozy and Bruni win damages over Ryanair ad. A French court ordered budget airline Ryanair on Tuesday to pay damages to President Nicolas Sarkozy and his new wife Carla Bruni for using their picture in an advertisement but the sum was less than Bruni had sought. The court ordered Ryanair to pay symbolic damages of one euro to Sarkozy and 60,000 euros (44,800 pounds) to his wife. Bruni, at one time one of the world's most highly paid fashion models, had been seeking damages of 500,000 euros. Feb 5, 2008

Ryanair

Ryanair Q3 Profit Down 27 Percent. Ryanair posted a sharper than expected drop in third-quarter net profit on Monday and warned high oil prices, an economic slowdown in the UK and weak sterling meant profits may fall up by to 50 percent next year. Europe's biggest low-cost carrier said net profit in the three months to the end of December fell 27 percent to EUR35 million euros (USD$52 million) as winter fares fell almost 5 percent. That excludes a one-off gain from the sale of aircraft. Ryanair stuck to its full-year forecast for a 17.5 percent rise in the year to the end of March. It warned, however, there was a "significant chance" profits would fall in its 2008/2009 business year. Feb 4, 2008

Ryanair

Ryanair will start flights from Dublin to Brest, Rodez and Tours in April. It also announced a thrice-weekly Cork-Carcassonne that will run from the end of May to the first week of September. Feb 4, 2008

Ryanair

Ryanair's Changing Altitude. On Feb. 4, Michael O'Leary, chief executive of Ryanair, Europe's largest airline by number of passengers, warned that its profits could be cut by up to half next year due to a "perfect storm" of rising oil prices, weakening consumer demand, and higher airport charges. Shares plunged more than 15% in Dublin trading on the news before bouncing back to end the day down 2.2%. Feb 4, 2008

Ryanair

Ryanair's stock has fallen 18 percent since the start of the year due to fears over the impact of rising energy costs and the company's limited fuel hedging for the year starting April 2008. The airline said it was in a better position than most competitors to cope with the tough market and it hoped to cut costs further as airports offer aggressive discounts due to falling demand. Feb 4, 2008

Ryanair

Shares at Europe's leading no-frills airline tumble on warning of tough 2008. Shares in Ryanair Holdings PLC plummeted Monday after Europe's top no-frills airline reported flat third-quarter profits and warned of tough times ahead because of high fuel costs and fears of a recession. For the quarter ended Dec. 31, Ryanair said its net profit fell 1 percent to 47.2 million euros ($69.9 million). Sales rose 16 percent to 569 million euros ($842.7 million), while passenger numbers rose 21 percent to 12.4 million, reflecting the carrier's relentless expansion of routes across Europe. Feb 4, 2008

Ryanair

According to the most optimistic scenario, profit next year Ryanair could grow 6 percent to EUR500 million if average ticket prices, or yields, stay flat and oil prices drop to USD$75 a barrel. The company also said it planned to spend up to EUR200 million buying back shares which, based on its current share price, would equate to 3 percent of Ryanair's share capital. Feb 4, 2008

Ryanair, EasyJet, Vueling, Clickair

Spanish low-fare airlines at crossroads. The four carriers: Ryanair, easyJet, Vueling and Clickair hold a combined 76% of the Spanish LCC market, with the remainder split among seven other operators. Overall, LCCs increased their market share in Spain to 33.6% in 2007 from 24% in the prior year. Feb 6, 2008

SkyEurope Airlines

SkyEurope Airlines' new CEO said the carrier is in a "turnaround" and hopes to stem its losses and ensure financial viability. It launched out of Bratislava in February 2002 with a single Brasilia. By last September it was operating 14 Boeing 737-500s and serving 44 destinations in 10 countries. It lost 24.1 million ($35.7 million) in the fiscal year ended Sept. 30, 2007, and 57.3 million in the prior year. "We had a high cost base, low yields and massive growth," CEO Jason Bitter said at the recent Raymond James Growth Airline Conference in New York. "We came through with a chainsaw. Costs we can control a lot better than revenue." Bitter said the carrier has consolidated its five bases into two, eliminated some routes and increased frequencies on others. It also eliminated 200 positions. "We fly to less places more often," he said. "We are still trying to lower costs." SkyEurope is modeling its cost structure on Ryanair's and hopes to become one of the leading LCCs in Europe, he said. It benefits from the lower employee costs in Slovakia and is counting on the growing number of passengers wishing to travel between Eastern and Western Europe. Feb 6, 2008

ZZ

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Publication:Airguide Online
Date:Feb 11, 2008
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