Airline shares take off on bullish United outlook

Shares in European airlines took off Thursday after United Airlines forecast surging travel demand as the pandemic impact fades on the aviation sector.

British Airways parent IAG and low-cost rival EasyJet saw their share prices soar by about six per cent nearing midday in London.

France’s Air France-KLM stock jumped around four per cent in early afternoon deals in Paris and Germany’s Lufthansa gained a similar proportion in Frankfurt.

Overnight, US carrier United Airlines forecast “the strongest second-quarter revenue guidance in company history” despite logging another Covid-induced loss for the first quarter.

The news also sent United shares leaping in after-hours trade.

“The European aviation sector is benefitting from the general improving sentiment related to the pandemic recovery which has clearly helped restore faith in some of the most hit segments of the economy,” XTB analyst Walid Koudmani told AFP.

“After what has been a very difficult few years for the aviation industry, as a result of lockdowns and alarming inflation, United Airlines’ outlook certainly inspired some confidence.”

The aviation sector was ravaged by the Covid crisis that erupted in early 2020, decimating demand and grounding planes worldwide.

United’s outlook helped spark bumper gains on the Frankfurt and Paris stock exchanges on Thursday.

The London market, however, flatlined, hit by poor earnings news from mining giants Anglo American and Antofagasta.