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North Asian airline shares slammed as fuel hedging losses hit USD3 billion - share price wrap

  • China Airlines discloses USD629 million in paper losses from hedging in 2008;
  • North Asian airline fuel hedging losses hit USD3 billion.

China Airlines is the latest North Asian carrier to reveal significant paper losses from ill-fated fuel hedging activities last year. The Taiwanese carrier disclosed a USD629 million unrealized loss last year, taking such losses for North Asian carriers, including Cathay Pacific (shares down -1.4% yesterday), Air China (-9.4%) and China Eastern Airlines (-7.1%) to USD3 billion. Much more is set to come as other carriers disclose their positions in coming weeks.

EVA Air (-1.4%) also expects to report losses from its hedging activities in 2008 shortly.

China Eastern expects to report a "significant loss" for 2008, its third unprofitable year in four. Its hedging losses alone are roughly equivalent to the massive government bailouts for the carrier announced by Beijing last month.

Asia Pacific selected airlines daily share price movements (% change): 12-Jan-09

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