Gategroup performs well despite airline industry worries

The provider of onboard services to companies reported a first-half profit up by 89.3% on a constant currencies basis, which the company said is primarily due to net foreign exchange gains of CHF 26.3 million. Chief executive Guy Dubois said: "gategroup's business model is built to withstand the shocks of the cyclical industry it serves, and these results demonstrate that resilience. We will continue to work closely with our key accounts as partners to address this economic challenge." The results came on total revenue of CHF 1,291.8 million for the half year, a 2.0% drop in constant currencies. In May, gategroup undertook a significant next step in its evolution by listing its shares on the SIX Swiss Exchange under the symbol "GATE". Looking ahead, Dubois said the airline industry's financial condition remains fragile: "In our view the travel industry cycle has not yet reached bottom, and a turnaround will not be simultaneous across the world. We expect the US market to lead the way out, while Europe may see two to four more quarters of prolonged weakness. In addition to the continuously weak economic environment, the impact of the H1N1 swine flu pandemic may also have a delaying effect on the recovery."