Airline Finance News - Europe

AirGuide Business, July 21, 2008

Lufthansa

Lufthansa Staff Hold Ballot On Summer Strikes. Germany's Verdi trade union said it has launched a ballot at Lufthansa on possible strikes over pay during the summer. Verdi said results were expected a day later and strikes could start the following weekend. Talks between Lufthansa and Verdi on salary for about 50,000 ground and cabin staff collapsed on Thursday, fueling fears of chaos for thousands of passengers. Verdi wants a one-year contract with a 9.8 percent pay rise after Lufthansa boosted operating profit by 63 percent to EUR1.38 billion euros (USD$2.2 billion) last year. Lufthansa has offered a 21 month contract with a two-step-rise of 6.7 percent and a 1 percent one-off payment. The carrier aims to match last year's performance in 2008 despite high fuel costs and economic weakness. Warning strikes at the beginning of July forced the carrier to scrap more than 40 flights. 7/15/2008

Norwegian Air

Norwegian Air swings to loss. Expansion and fuel costs weighed heavy on Norwegian's bottom line in the second quarter as the LCC reported a NOK62.2 million ($12.3 million) loss that represented a reversal from a NOK44.7 million profit in the year-ago period. Looking ahead, it said third-quarter demand is "satisfactory" and it is "intensifying cost reductions as well as taking measures to increase revenues." A fuel surcharge introduced in May has covered 20%-25% of the increase in fuel costs, a ratio that should grow. It expects full-year unit cost of NOK0.55. 7/18/2008

Norwegian Air

Norwegian Air yesterday it unveiled a cooperation agreement with Copenhagen-based LCC Sterling Airlines that will feature reciprocal codesharing on CPH-Oslo Gardermoen and CPH-Stockholm Arlanda flights beginning Sept. 15. From the end of October the agreement will extend to six additional European destinations from OSL (operated mostly by Norwegian) and four from ARN (mostly by Sterling.) 7/18/2008

Norwegian Air

Norwegian Air's second-quarter revenue rose 52.3% year-over-year to NOK1.55 billion as passenger numbers climbed 50% to 4.3 million. EBIT swung to a NOK72.7 million loss from a NOK66.9 million profit in the year-ago period. The mainline flew 1.86 billion RPKs, up 33%, against a 34% rise in ASKs to 2.37 billion, driving load factor down 1 point to 78%. Norwegian.se flew 79% full with no year-ago comparison available. Mainline yield fell 7.4% to NOK0.63, unit revenue dropped 7.4% to NOK0.5 and unit cost rose 1.9% to NOK0.54. The company is entirely unhedged. 7/18/2008

Norwegian Air, Sterling Airlines

Scandinavia's two biggest budget airlines, Norwegian Air Shuttle and Danish-based Sterling Airlines have signed a "strategic cooperation" agreement on a number of routes, Norwegian Air said on Thursday. The two low-cost rivals to Scandinavian airline SAS will cooperate on the Oslo-Copenhagen and Stockholm-Copenhagen routes from September 15. From the end of October the cooperation will be extended to a number of international destinations from Oslo and Stockholm. The deal still needs approval from competition authorities. 7/17/2008