Cathay Pacific’s shares were down 1.2% yesterday, on the same day that CEO, Tony Tyler, speaking at the Aviation Club in London, stated he remains “cautious” about the prospects of the aviation industry seeing any sustained pick-up in the near future.
He stated that while there is talk about 'green shoots' of recovery, “we are not seeing much of that kind of plant life ourselves”. Mr Tyler also questioned whether the recently signs of stabilisation in the large drops in cargo and passenger numbers is seasonal or structural.
Describing this concern, Mr Tyler explained, “this is traditionally a good time for us on both the premium passenger and freight fronts. And we are seeing that this year. But whether it heralds a return to greener pastures remains to be seen. We’ll have a better idea by the end of the year. I remain cautious. What I think is happening is a slow recovery effect exaggerated and amplified by seasonal factors. The longer the seasonal effect lasts, the easier it is to kid ourselves that we are seeing a sharp rebound. I’m not so sure”.
He added that Asian airlines have been hit harder than their European and US counterparts in the current financial meltdown, in a large part due to the collapse in premium traffic. However, Mr Tyler stated the region is likely to bounce back more quickly when true recovery comes, stating, “that is the nature of the region. Asia is sharply focused on economic development, it is on strong financial foundations and it’s entrepreneurially nimble and agile”.
Qantas “seeing some encouraging signs” but outlooks “remains uncertain”
Qantas’ shares were stable yesterday, as Chairman, Leigh Clifford, stated the carrier is starting to see signs of improvement in demand, adding that the Qantas Group is well positioned for when the global economy recovers.
According to Mr Clifford, “the global economic outlook remains uncertain. We are seeing some encouraging signs and certainly no further deterioration. The Qantas Group is well-positioned to withstand this period of downturn with the strengths of its two flying brands, strong management, and dedicated people. And the Group will be ready to emerge strongly, and seize the opportunities when conditions improve”.
Asia Pacific selected airlines daily share price movements (% change): 21-Oct-09
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