December 1, 2022

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Emission of the crisis, traffic numbers and inflation - E24

Emission of the crisis, traffic numbers and inflation – E24

This week is the deadline to fill up the cash fund for crisis-stricken Flyr. Meanwhile, SAS is providing traffic numbers for October, before on Thursday providing inflation numbers here at home and in the US.

Need for money: Last week, the airline Flyr provided quarterly numbers for the third quarter, while simultaneously declaring a crisis issue.
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For young airline Flyr, next week will be exciting. Last week, it became known that Flyr will collect 430 million new kroner. The deadline for getting this done is Tuesday.

-If you look at Flyr’s personalities and history since the company’s founding, it’s a prime example of how difficult it is to establish yourself in the industry, says aviation analyst Jacob Pedersen at Sydbank to E24.

According to Pedersen, the Flyr was created at the right time, as it was possible to get aircraft and personnel inexpensively. He believes they were also lucky when they started when Wizz Air was out of the Norwegian market. In addition, the company was founded by people who know the industry well.

If you look at the company’s development and profits, it’s a terrible story. Now the company is also downsizing the fleet, which is never a sign of health, Pedersen says.

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Flyr has already raised several capitals and is waiting for a new round next week. Pedersen doesn’t want to comment concretely on what he thinks about the outcome, when Flair goes out to raise fresh capital on Tuesday.

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Waiting for “numbers maybe a little better” from SAS

Rival SAS will also provide interesting numbers on Tuesday. They give their pass numbers for the month of October.

Before the company presents its second-quarter numbers, aviation analyst Pedersen said that specifically it will be very important to follow the September and October traffic numbers, in order to get a picture of what the pilot strike in July could mean for the company.

He insists on it so far.

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Compared to a “normal year” 2019, also corrected for the strike experienced by SAS in May of that year, Pedersen claims that SAS had between 100,000 and 200,000 fewer passengers in September.

Watching the airline market: Sydbank analyst Jacob Pedersen.

“I think we’ll see similar numbers for October, maybe slightly better numbers,” Pedersen says.

The reason he thinks the numbers may be a little better in October is that SAS recently started cutting prices in hopes of regaining the market share the company lost during the strike in July.

– Therefore, the number of fewer passengers should be somewhat reduced. If that doesn’t yield numbers, SAS already faces a major challenge. If price cuts don’t do the trick, one can begin to wonder if they will be able to recover those lost shares in the market, Pedersen says.

Still waiting for price pressure

Towards the end of this week, we’ll have inflation numbers here at home and in the US. It happens on Thursday and it will be the highlight of the week, according to chief economist Sarah Midtgaard at Handelsbanken Capital Markets.

It will be important to keep track of US inflation numbers in the run-up to the Fed’s new interest rate announcement in December, says Midtgaard.

Last week, the Federal Reserve, short for the US Federal Reserve, raised its key interest rate by 0.75 percentage points to a range of 3.75 to 4.0 percent. At the same time, Federal Reserve Chairman Jerome Powell indicated that the central bank will continue to raise interest rates in the future.

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After the big numbers: Chief Economist Sarah Midtgaard at Handelsbanken Capital Markets.

On Friday came US employment numbers, called Non-Farm Payrolls, which showed that 261,000 new jobs were created in the US in October.

Midtgaard points out that the employment numbers were strong, so it will be interesting to see where inflation is coming from.

The numbers have recently seen an unfortunate development, core inflation rose 0.6 percent month over month in September, with annual growth of 6.6 percent, she says.

The monthly growth rate is expected to drop slightly to 0.5. If this pace continues to move forward, annual growth will not decline much in the near future. If the numbers come on the stronger side this week, it will be difficult for the Fed to hold onto a 0.5 percentage point increase in December, she continues.

Read on E24 +

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The economist is also awaiting the Norwegian inflation figures, which will arrive on the same day.

We expect core inflation to rise. It surprised 5.3 percent in September. We expect 5.5 in October, well above the Norges Bank forecast of 5 per cent. Midgard says price pressure remains strong on the economy.

She also indicated that members of both the US and European central banks will speak this week.

– She said that it would be important to follow their statements, and the message they send in a timely manner, and how tough they are.