Airlines shares rise as airports reopen
Wednesday saw the first full day of open airports across the majority of Europe after six days of closures. The impact on airports, airlines, passengers and other industries has been huge and it could take up to two weeks before normal operations return.
The International Air Transport Association, IATA, yesterday put a figure on the losses suffered by the airline industry of $1.7 billion. This would be a problem for any industry, but the airlines were only just beginning to struggle their way out of a damaging recession.
The start of 2010 had seen growing traffic figures and there had been some cautious optimism that the worst was over.
On Monday as the market re-opened shares for most major European airlines had fallen around 5% as the result of the ban on flying which left their fleets grounded. The lasting effects remain to be seen but some companies are likely to be in difficult financial positions. IATA claimed at the beginning of the week that if the crisis continued as many as five airlines would be facing bankruptcy.
Fortunately, aircraft are now flying again. However, the Icelandic volcano is still erupting and there will continue to be some no fly zones in place in the coming weeks. It is hoped that our understanding of volcanic ash, and what densities of it are damaging to aircraft, will have grown during this challenging period.
Yesterday the share prices of airlines began to climb once again as schedules returned to some semblance of normality. British Airways climbed 2.9p, easyJet 8p, while Ryanair grew 2.55%. These gains have been seen all over Europe, with Lufthansa up 1% and SAS 2%.
At the beginning of the week, analysts at HSBC said that if the closures had continued for 10 days airlines as big as British Airways and Lufthansa would have lost the entirety of their operating profits for the whole year.
Source: The Guardian
