What’s working; what’s not. Airlines in Europe

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FOXTROTS*

 

What’s working; what’s not. Airlines in Europe

Our summary of traffic results for the leading airlines (not, where relevant, airline groups) in Europe, excerpts from the current editions of the Travel Business Analyst newsletter, over January-April.

 

Seat sales (RPKs for British; our estimates for Ryan), in alphabetical order: Air France+KLM (starting this year, no longer separated) -1%; British +1%; Easyjet +5%; Lufthansa +7%; Ryanair +7%.

 

Notes (on notable details; on whole-group for Air France, British (=ICAG), Lufthansa):

-Air France group (AFG). We presume AF’s striking employees are causing the fall. We are still surprised KLM wants to be associated with this (until this year, its figures were separated, showing its superior performance compared with AF. Transavia had a bad month (+1%); also bad because it should be pulling AFG out of AF’s business mess.

 

AFG says its Joon subsidiary has sold 1mn seats; that looks good, but because AFG publishes no meaningful figures, we cannot say if the airline is doing well or not. (This presumably is the reason AFG hides the figures.)

 

We note that at this time when AFG reduces published data, the Lufthansa group has started to add more – notably traffic out of its Frankfurt and Munich hubs.

 

-British (=ICAG). BA is still the weak partner in the group, traffic flat as Iberia grows +11%. The other problem ICAG will need to resolve is weakness at AerLingus (+1%; our estimate). AL should be at least as fast as Vueling (+7%; our estimate).

 

-Easyjet. That +5% needs to be improved, although Easy did manage to squeeze seat factor +0.5pts.

 

-Lufthansa. Seems to be operating in a different faster world than the struggling groups AF-KL and ICAG – Austrian +6%, Brussels +10%, Eurowings +22% (yes), Lufthansa +5%, Swiss +12%, and the whole group +9%.

 

-Ryanair. Showing a good +9% (although around +15% was more common up until one-year ago). And no growth in seat factor. At 96% that might be the peak. (Note, however, that Ryan rounds that figure, and does not provide the data for us to calculate something more precise. So its seat factor could be falling – from 96.4%, say, in 2017, to 95.6% this year.)

 

-Others of note: As AF-KL now provides less information, which opens space. We have added Russia’s Aeroflot, which is having a good year. April +9%, YTD +7%.

 

The Fox. Remember, I’m an industry expert in the parallel world.

 

 

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

 

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June travel stocks’ ups and (mainly) downs.

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FOXTROTS*

 

June travel stocks’ ups and (mainly) downs.

Travel stocks (US, Asia Pacific, Europe) in June. Airlines: biggest growth, Wizz +6%; biggest fall, China Southern -20%. Hotels: Melia +0.2% sic, Dusit Thani -18%. Tech: Travelport +6%, eDreams -18%. Others: Walt Disney +5%, Avis -17%.

 

Comments:

Concern over a trade war hits travel stocks as well. 63 of the 75 travel stocks we track, fell (one was flat).

 

Unbelievably, only one hotel stock (of the 23 around the world we track) grew – and that by +0.2%, essentially flat. This appears to indicate that investors believe that hotels will be hit harder than, say, airlines.

 

Yet airlines also had a bad month. Even Lufthansa (which we think has the best businessplan among big airline groups, 75mn-plus annual seat sales) fell -11%.

 

China’s airlines as a group did worst (in airline size -20% -15% -17%).

 

Among hotels, Wyndham’s corporate break-up in May was partly responsible for its -11%. Another surprise was at Mandarin Oriental, usually a solid stock, down -10%. Does this mean investors think business travellers – MO’s strongest segment – will be affected most by world-hating US trade (and other) policies?

 

 

Previous month: Airlines: biggest growth, United +21%; biggest fall, Jet AW -36%. Hotels: Belmond +12%, Millennium & Copthorne -6%. Tech: Amadeus +12%, Last Minute -16%. Others: China Travel Service +18%, Hertz -31%.

 

TBA Travel Stocks Index: World 234, Asia Pacific 105, Europe 214, US 381. Index previous month: World 248, Asia Pacific 114, Europe 217, US 412.

 

NVTT (Net Value Travel Tech) Stocks Index: 132; previous month 136.

 

Stockmarkets. Biggest growth Wellington +3%; biggest fall Bangkok -8%. Previous month: biggest growth Dublin +5%; biggest fall Kuala Lumpur -6%.

 

Comments:

Bangkok’s market fall was part responsible for Thai’s -20% fall and Dusit worsting all the world’s hotel groups. For interest, our US index (made up of three markets) was flat (+0.2%).

 

 

Info from the Travel Business Analyst newsletters.

 

 

The Fox. Remember, I’m an industry expert in the parallel world.