Improvements in december's figures imply confidence is returning after september's attacks
British Airways, Europe's number one airline, said December passenger traffic fell 10%, less than the previous month, showing that demand is reviving following a decline after the 11 September.
British Airway's traffic had fallen 18% in November. The improvement mirrors one reported earlier by KLM Royal Dutch Airlines. The UK carrier's shares climbed as much as 12% following the KLM announcement.
'Market conditions in December continued to be difficult but showed a measurable improvement on the previous month,'' British Airways said in a Regulatory News Service statement. 'Overall revenue, while clearly below last year's level, is exceeding initial expectations.''
Demand for air travel fell more than a third after hijacked planes were used to destroy the World Trade Center, leading to estimated losses of $11bn on international routes, according to the International Air Transport Association. The latest numbers signal the start of a recovery, analysts said.
'The figures show that people are gradually returning to the skies and that traffic is moving in the right direction,'' said Andrew Lobbenberg, an airline analyst at JPMorgan, following the release of the KLM figures. He rates British Airways shares 'market perform'' and KLM 'underperform.''
British Airways said it reduced passenger capacity 13% in December from a year ago. Passenger load factor, or the proportion of seats sold, rose 1.5% to 68.6%.
The airline said there will be a non-cash accounting credit of £85m in its third-quarter financial results as a result of Japanese yen depreciation against the pound.
British Airways' passenger traffic to and from the Americas, the market worst affected by 11 September, fell 13% in December, compared with 24% in November, it said.
More profitable premium traffic was down 18.3% compared with a 25% November decline.
KLM's December passenger traffic showed a decrease of 10% from December 2000, compared with a decline of 18% in November. Its shares rose as much as 9.7%.
EasyJet, Europe's number two no-frills carrier, said it is in talks with Boeing and Airbus SAS, the top makers of commercial aircraft, to buy new planes for delivery in the next five years as it expands into new routes.
EasyJet plans to buy as many as 75 aircraft by 2007 and is interested in Boeing's 737-700 and Airbus A319 planes, it said in a statement released on the UK Regulatory News Service.
'Given the current state of parts of the global aviation industry this is potentially a very good time to be addressing our long-term aircraft needs,'' said chief executive Ray Webster.
'We have already committed to grow aircraft capacity by approximately 25% per annum until 2004.''
The Luton-based airline currently has an all-Boeing fleet. It operates 18 Boeing 737-300s and nine 737-700s and plans to take delivery of 23 more 737-700s through May 2004. EasyJet is expanding its fleet as it takes over routes abandoned by major airlines since the 11 September attacks.
British Airways provides international and domestic passenger and cargo airline services, which extend to more than 165 destinations in more than 85 countries. The group also owns a percentage of a number of airlines, including Qantas, Deutsche BA and British Regional. Group services/interests include computer reservation systems, travel services, airline marketing and ˜oneworld', an alliance with seven airlines.
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