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China Southern yields remain depresses, EVA Air losses improve; Thai seeing improvements

31-Aug-2009

Thai Airways' shares have enjoyed a strong rally recently, but slumped 5.2% on Friday (28-Aug-09). The carrier stated it is experiencing improved and higher than expected load factors this month (currently at 76%).

The carrier added that load factors are expected to be 'stable' in Sep-2009 through to Dec-2009 and it is confident of achieving EBITDA of between USD742 million and USD890 million for the full year. The carrier also stated it is considering raising capital to improve its balance sheet, as part of its restructuring plans, with a final decision to be made in Dec-2009.

China Southern yields remain depressed; 2H2009 outlook remains uncertain

In the China market, China Southern slipped 1.9% on Friday, after reporting a 91% decline in net profit in 1H2009 (to USD9.5 million) and an USD110.5 million operating loss, as increased passenger numbers (+10.7% to 31.0 million) failed to offset a lack of currency gains (-99% year-on-year) and lower yields.

In the period, overall yield slumped 13.3%, driven by a 13.6% reduction of domestic and 13.0% reduction in Macau/HK/Taipei yields. Cargo/mail yields were even weaker, down 18.6%. The carrier’s overall load factor (63.6%, -1.5 ppts) also failed to match the breakeven load factor of 67.5% (-2.3 ppts), resulting in a 3.9 ppts gap.

The carrier also warned the outlook for 2H2009 remains uncertain, stating, “the international aviation market demand may still be in the doldrums, and “the recovery of global economy remains uncertain. The international aviation market demand may still be in the doldrums, and the overall international oil price shows an upward trend, while the domestic civil aviation industry will be confronted with challenges in areas such as rapidly growing traffic capacity and spread of flu epidemic”.

Hainan Airlines reports net profitability, operating loss in 1H2009

Hainan Airlines, meanwhile, was stable on Friday, before the release of its 1H2009 financial today. The carrier reported a net profit of USD26 million (-43.7%) and an operating loss of USD222,000 (compared to a USD43 million profit in the previous corresponding period). The carrier transported 8.1 million passengers in the period, a 13% year-on-year increase, with the carrier going against the norm and reporting slight growth in cargo volume.

EVA Air reports improved losses on fuel hedging gains

In other financial news, Taiwan's EVA Air (-0.1% on Friday) reported a USD52 million operating profit in 2Q2009 and a USD51 million net loss, an improvement from losses of USD153 million and USD181 million in the previous corresponding period, due to gains from its fuel hedging contracts. Revenues slumped 27% in the period, although operating costs fell at an even greater rate, down 31%.

Elsewhere, Cathay Pacific gained 0.9% on Friday, while Qantas slipped 2.3%.

Asia Pacific selected airlines daily share price movements (% change): 28-Aug-09


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