Exceptionally cold weather and heavy snowfall have caused travel chaos for airlines in Europe, but analysts say the disruptions will not mar a positive outlook for the airline sector if corporate travel increases next year as expected.
The impact of the weather in recent days is considered a short-term, "one-off event"that should not affect investment ratings, said Tony Shepard, an analyst at Charles Stanley. Analysts have compared the disruption to that caused by a volcanic ash cloud this year. That period of flight disruptions hit market sentiment in the short term but had no lasting impact.
Recently, thousands of travellers have been stranded at European airports as snow-clogged runways and shortages of de-icing equipment and fluid led to cancelled or delayed flights.
Paris's Charles de Gaulle airport, Europe's second-busiest, cut the number of flights by 35 per cent on Christmas Eve because of a shortage of the antifreeze used to remove ice from aircraft wings and fuselages, and has forecast more bad weather. About 2,000 people were forced to spend Thursday night at the two main airports in Paris as snowfall in the north and east of France continued to disrupt transport services.
"I can't remember the weather being this bad in December," said Jan Van der Cruysse, a spokesman for Brussels airport. The airport prepared hundreds of beds for stranded passengers over Christmas after it reopened to inbound flights following a day of delays and cancellations.
Friday's disruptions came after chaos earlier in the week, when tens of thousands of travellers were stranded across Europe as delays and cancellations of flights and high-speed trains were compounded by weather-related restrictions on road travel.
When the weather clears, however, airlines can look forward to a year of increased demand.
The more profitable business segment of air travel is rising again, as economies emerge from recession.
"It's really about the premium business traffic. It's linked to the strength of the corporate sector, and the pick-up in world trade growth, which is continuing," said Richard Batty, a strategist at Standard Life Investments in Edinburgh.
Revenue at Air France-KLM is forecast to rise to €27.2 billion (Dh131.05bn) for the year to March 2012, up 11 per cent on the year to March this year, according to Credit Suisse estimates, largely because of a rise in premium traffic. Analysts say airlines' costs will not rise as much as turnover because revenue per unit of traffic tends to be higher for business travel, even with budget airlines.
Overall passenger traffic for most airlines in recent months is up on a year ago, reversing a trend earlier in the year, according to the airlines' own figures. On average, more seats are being filled, boosting operating margins, analysts say.
The International Air Transport Association said this month that the number of passengers travelling in premium seats - first and business class - was 10.9 per cent higher in October than in the same month a year earlier.
It also said the world's airlines would return to profit this year and next at higher levels than previously expected because of an upturn in the market and better use of their capacity.
"The airlines did a good job on restructuring [through the downturn]", said Stephen Furlong, an analyst at Davy Research, who has an "outperform" rating on the sector.
Even a projected rise in oil prices next year, currently hovering at about US$90 per barrel, may not have a major impact.
Analysts say that if oil price rises are linked to economic growth, rises in fares and traffic will more than compensate. And any surprise moves in the oil price are being managed by airlines hedging their requirements. "If the oil price is higher, that will be reflected in the fares as well," said Gert Zonneveld, an analyst at Panmure Gordon.
* with Agencies
MATCH INFO
English Premiership semi-finals
Saracens 57
Wasps 33
Exeter Chiefs 36
Newcastle Falcons 5
Meatless Days
Sara Suleri, with an introduction by Kamila Shamsie
Penguin
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
SPEC%20SHEET%3A%20SAMSUNG%20GALAXY%20S23%20ULTRA
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Founders: Abdulmajeed Alsukhan, Turki Bin Zarah and Abdulmohsen Albabtain.
Based: Riyadh
Offices: UAE, Vietnam and Germany
Founded: September, 2020
Number of employees: 70
Sector: FinTech, online payment solutions
Funding to date: $116m in two funding rounds
Investors: Checkout.com, Impact46, Vision Ventures, Wealth Well, Seedra, Khwarizmi, Hala Ventures, Nama Ventures and family offices
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Gulf Under 19s final
Dubai College A 50-12 Dubai College B
PRISCILLA
%3Cp%3EDirector%3A%20Sofia%20Coppola%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Cailee%20Spaeny%2C%20Jacob%20Elordi%3C%2Fp%3E%0A%3Cp%3ERating%3A%203%2F5%3C%2Fp%3E%0A
Zayed Sustainability Prize
COMPANY%20PROFILE
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More on animal trafficking
UAE currency: the story behind the money in your pockets
The Matrix Resurrections
Director: Lana Wachowski
Stars: Keanu Reeves, Carrie-Anne Moss, Jessica Henwick
Rating:****
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
DIVINE%20INTERVENTOIN
%3Cp%3EStarring%3A%20Elia%20Suleiman%2C%20Manal%20Khader%2C%20Amer%20Daher%3C%2Fp%3E%0A%3Cp%3EDirector%3A%20Elia%20Suleiman%3C%2Fp%3E%0A%3Cp%3ERating%3A%204.5%2F5%3C%2Fp%3E%0A
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
'Midnights'
%3Cp%3E%3Cstrong%3EArtist%3A%3C%2Fstrong%3E%20Taylor%20Swift%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ELabel%3A%3C%2Fstrong%3E%20Republic%20Records%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
Sustainable Development Goals
1. End poverty in all its forms everywhere
2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture
3. Ensure healthy lives and promote well-being for all at all ages
4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
5. Achieve gender equality and empower all women and girls
6. Ensure availability and sustainable management of water and sanitation for all
7. Ensure access to affordable, reliable, sustainable and modern energy for all
8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
9. Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation
10. Reduce inequality within and among countries
11. Make cities and human settlements inclusive, safe, resilient and sustainable
12. Ensure sustainable consumption and production patterns
13. Take urgent action to combat climate change and its effects
14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development
15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
17. Strengthen the means of implementation and revitalise the global partnership for sustainable development
The specs
Engine: 1.5-litre 4-cyl turbo
Power: 194hp at 5,600rpm
Torque: 275Nm from 2,000-4,000rpm
Transmission: 6-speed auto
Price: from Dh155,000
On sale: now
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
