European airlines shrug off fears of winter slowdown

European airlines shrugged off fears of a winter slowdown on Wednesday as they posted strong November passenger numbers, but analysts warned it may be harder to keep planes full as carriers add flights in crowded markets.
Air France-KLM, Britain's easyJet and Scandinavia's SAS reported higher passenger traffic and stable load factors for November, sending some airline shares to multi-year highs.
They followed strong numbers from low-cost giant Ryanair and British Airways, helping to ease fears about high fuel bills and an expected lull in demand for travel over the winter.
However, analysts said airlines could be forced to lower airfares or fly empty planes if supply outstripped demand as carriers add more planes to their fleets.
"You have a slightly better capacity situation in Europe but I am concerned about the number of orders being placed and what that is going to do," said analyst Chris Tarry at UK-based aviation consultancy CTaira.
"Revenue growth is important but they shouldn't let what may appear to be a slight improvement in the traffic environment for some airlines remove the need to continue to cut costs."
Orders for new Airbus and Boeing aircraft have been flooding through in recent weeks. Finnair said on Wednesday it had ordered 1 billion euros in new Airbus planes.
BA said on Monday it would need to keep offering discount tickets and promotions to fill its planes. However, a strong rise in its first and business class - or premium - passengers in November was welcomed by the market.
"People liked the data from BA, they like the mix. People are flying premium class," one trader said on Wednesday. Air France-KLM stock rose 2 percent by 1126 GMT on Wednesday to trade at its highest levels since February last year after reporting a 12.2 percent rise in passenger traffic.
SAS gained 3 percent to its best levels since 2001 after posting a 16.5 percent rise in passengers. Shares in BA, Europe's third-largest airline, rose more than 2 percent to their highest level since March 2004 and within a few pence of a 52-month high, dealers said.
Analysts said the November figures demonstrated that airline traffic was showing no sign of losing the momentum from summer when demand remained robust despite higher ticket prices and fears of an economic slowdown. "The good times are rolling, but for how much longer?" Goldman Sachs airline analysts wrote in a recent report.