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Chinese aviation profits surge in Feb-2010 on the back of Chinese New Year traffic resurgence


CAAC reported a 523% surge in industry profits in Feb-2010, to CNY2.1 billion (USD303.1 million), due to significant increases in passenger and cargo traffic attributed to the Chinese New Year Holiday period. Airline profits surged 1.458% to USD253 million, with airport profits up 345% to USD16 million.

The improved financial and traffic performance in the month was largely a result of the two-week Chinese New Year period falling a month later in 2010 than in 2009, although, as noted by Cathay Pacific, “a general pick-up in the quality of demand since the lows of last year’s economic crisis has continued”.

The traffic results of the Chinese, and Taiwanese, carriers, were positively affected by this holiday traffic, with Air China, China Southern and Taiwan’s China Airlines all reporting improved traffic results (on 15-Mar-2010) in Feb-2010:

  • China Southern Airlines (shares down 2.1% yesterday, in a day which saw all Asia Pacific airline’s lose ground except for Asiana and ANA): Reported an 18% increase in passenger numbers, to 5.9 million, with growth in domestic, regional and international operations (of 15%, 41% and 63%, respectively). Passenger load factors averaged 78% (-0.4 ppts), while cargo volume was up 23% to 65,000 tonnes; 
  • Air China (Shares down 0.7%): Reported a 14% increase in passenger numbers to 3.5 million, with an average load factor of 79% (+2.2 ppts). As was the case at China Southern, double-digit passenger growth was experienced on domestic, international and regional sectors (up 11%, 24% and 66%, respectively). Cargo volumes increased 33% to 73.370 tonnes; 
  • China Airlines (Shares 1.4% weaker): Reported double-digit passenger and freight yield improvements in Feb-2010, of 11.3% and 19.2%, respectively. Passenger numbers were also up, by 29.3% with an average load factor of 79.9% (up 7.7 ppts). Cargo traffic (FTKs) gained 83% in the month.

Earlier this month, Cathay Pacific, China Eastern and EVA Air (shares down 2.5%, 3.9% and 2.2%, respectively, yesterday) also reported improved results as follows:

  • Cathay Pacific: Reported a 14.0% increase in passenger numbers to 2.1 million, with a 7.5 ppt load factor improvements to 84.1%. Cargo volume was up 19% to 119,801. However, the carrier added that  “premium volumes and yields in all cabins remain materially below pre-downturn levels”, although it was “encouraged to see the continuation of premium traffic growth after the holiday period ended”;
  • China Eastern: Reported a 30% increase in operating revenues in Jan/Feb-2010, to CNY9 billion (USD1.3 billion), resulting in an operating profit for the period; 
  • EVA Air: Reported a 30% jump in passenger revenues and a 99% increase in cargo revenues, to USD134 million and USD80 million, respectively, in Feb-2010, as passenger and cargo yields gained 13.3% and 12.7%, respectively, Passenger numbers were up 20% (to 512,940) with cargo volumes increased by 65% to 57,644 tonnes.

Also reporting traffic highlights for Feb-2010 yesterday was ANA (shares up 1.9%), Singapore Airlines (-0.4%) and Jet Airways (-1.9%), with all three carriers seeing improvements in passenger levels and passenger load factors.

For this and more coverage of the region’s aviation updates, subscribe to Asia Pacific Airline Daily. Other highlights in today’s edition include:

  • ANA Group international passenger up 23% in Feb-2010;
  • Sky Net Asia studying capital increase plans; network and fleet growth planned;
  • Cathay 'cautiously' bullish on 2010; seeking Middle East expansion; also considering Africa & India;
  • China Southern Airlines announces details of A and H share subscription;
  • Air New Zealand to increase domestic capacity from Jan-2011;
  • Singapore Airlines passenger numbers up 7.1% in Feb-2010;
  • Vietnam Airlines calls on Vietnamese Government to prevent AirAsia from launching JV;
  • Jet Airways international passenger numbers up 30.5% in Feb-2010;
  • SpiceJet claims 70% of Indian domestic traffic travels with LCCs.

Asia Pacific selected airlines daily share price movements (% change): 15-Mar-2010

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