Indian carriers gain on fuel reduction and loan ruling; Hainan Airlines shareholder reduces stake
Shares in Virgin Blue surged 11.6% yesterday, with investors appearing to back CEO John Borghetti's aggressive strategy to lure a greater share of the business market from Qantas, as well as its recent network overhaul which culminated in the removal of a number of loss-making routes. Shares in Qantas were up 2.0%.
Shares in Kingfisher Airlines also gained yesterday (+5.1%) as the carrier announced plans to raise more than USD350 million in funding, through a combination of global depository receipts and a local equity offering.
The carrier also benefited from news that the Reserve Bank of India (RBI) has agreed to ease rules for the restructuring of loans for the nation's debt-laden airlines. Banks will now be permitted to restructure unsecured aviation loans without classifying them as non-performing assets.
Also positively effecting Indian carrier stocks was news that India's aviation turbine fuel (ATF) rates have been reduced by 4%, the first reduction in rates since Jul-2010 following a softening of international oil prices. Shares in SpiceJet increased 3.4%, with Jet Airways shares 0.5% higher.
For more information see related article: Reserve Banks enables banks to restructure aviation loans; Kingfisher seeks to raise USD350m
Hainan Airlines shareholder sells 90 million shares
At the other end of the spectrum, shares in Hainan Airlines slipped 3.5% yesterday, following a 3.3% decline the previous day, on news that Hainan Industrial Holdings, the carrier's seventh-largest shareholder, sold 90 million shares in the carrier (equating to 2.2% of the carrier's total share capital) on the Shanghai Stock Exchange. Hainan Airlines Industrial Holdings now has 181,000 shares, less than 0.1%, in Hainan Airlines.
Air China shares, meanwhile, gained 2.9%, following the previous day's 1.8% decline. The carrier earlier this week entered into a supplementary agreement with Boeing to acquire 15 B787-9 aircraft. The company in 2005 was approved to purchase 15 B787-8 aircraft.
Asia Pacific selected airlines daily share price movements (% change): 01-Sep-2010
Source: Centre for Asia Pacific Aviation, Reuters & Financial Times