Shares in troubled Italian flag carrier Alitalia were suspended on Tuesday morning at the airline’s request ahead of an announcement on its future.
And a profits warning from another struggling European carrier, Swiss International Air Lines, has sent its shares diving more than 6%.
Investors rushed to dump the stock after SIA warned higher fuel costs meant it would not break even in 2004.
Traders expect Alitalia to announce details of another short-term loan.
The two airlines have been dogged by problems for several years, and both have recently changed their top management.
Rescue plans
Loss-making Alitalia, which is 62% state-owned, received a government-backed bridging loan, thought to be about 400m euros, in May.
It replaced both its chairman and chief executive under pressure from its militant unions, who then gave their support for a rescue plan.
But its auditors, Deloitte & Touche, signalled the airline’s future was far from secure by refusing to sign off its accounts.
Fuel costs
In a statement on Monday night, SIA said “the steep rise in fuel costs since the beginning of the year” and the absence of cost concessions from its maintenance partner had forced it to adjust its earnings objective for 2004.
“Current projections suggest that the company’s business performance for the year could fall short of a breakeven operating result,” it said.
It said it could incur extra unplanned costs of 85m Swiss francs if the price of kerosence stays at its current level of $36 a tonne.
Swiss said it was taking “appropriate action” to stay as close as possible to breakeven, though it gave no further details.
Board member Andre Kudelski has decided to stand down due to a divergence of views on the consequences of entry into the British Airways-led One World alliance, SIA said.
SIA shocked investors when it withdrew from a planned alliance with BA and One World earlier this year.
By: SHAMROCK321 - 22nd June 2004 at 21:43
I really thought they were going to join because they sold BA some LHR slots and they are very very very very very valuable.
By: Bmused55 - 22nd June 2004 at 14:12
Perhaps they are now regretting the decision to pull out of the One World deal?
Also, the resignation of that chap seems to indicate that perhaps that was a one man, big headed decision.
By: Bmused55 - 22nd June 2004 at 14:11
SIA = Swiss International Airlines, although I would have associated it with Singapore.
I was reading it as that too. LOL! Until the mention of loosing 85m Swiss francs
By: Mark L - 22nd June 2004 at 13:26
SIA = Swiss International Airlines, although I would have associated it with Singapore.
By: Pablo - 22nd June 2004 at 13:11
Assume SIA = Swiss. The article isn’t very clear.
By: SHAMROCK321 - 22nd June 2004 at 13:05
Where SIA going to join star allaince or did I misread it and it was Swiss?
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June 22, 2004 at 12:55 pm