AirAsia shares down despite bullish outlook; Jet Airways continues to lose domestic market share

AirAsia's shares were weaker yesterday, down 1.4%, despite the carrier providing a positive outlook upon the release of its 2Q2009 financial results. According to CEO, Tony Fernandes, “the current economic climate is well-suited for a low cost airline as consumers have become more price conscious and look for the best value”.

During the three month period,  AirAsia reported an operating profit of USD36 million (+328% year-on-year) with a profit after tax of USD39 million (+1,378%). The carrier’s Thai and Indonesian affiliates were also profitable in the period (AirAsia X financial data was only provided for 1H2009, with the long-haul LCC also profitable in this period). 

AirAsia plans to continue its expansionist plan and stated that it expects 3Q2009 passenger growth rates to be similar to the 22% growth experienced in the first half of the year - a point that is worrying investors. See related article: AirAsia’s operating profits up 328% in second quarter. Can the hot streak continue?

Jet Airways' shares were also weaker yesterday, slipping 2.1%, as the carrier continued to lose domestic market share in Jul-2009, with passenger numbers slipping 5.0% to 681,000, against an overall industry increase of 18.1%. The Indian share market has dropped more than 5% in the previous five days of trading, on concerns that poor monsoon rains will slow economic growth.

Shares in the Chinese carriers were also mostly down yesterday, led by Shanghai Airlines, which slipped 4.9%. China Southern (-4.7%), China Eastern (-4.5%), Air China (-4.0%) and Hainan Airlines (-3.8%) were also weaker, as Shanghai’s main stock index fell 4.7% for its lowest close in four weeks, on concerns that the year's 71% market surge has outrun the economic recovery rate.

Virgin Blue jumped 5.0%, following Tuesday’s 5.3% gain. Also up yesterday was Qantas (+2.8%) and Cathay Pacific (+1.2%), with Asiana and Korean Air also stronger, despite the Korea Composite Stock Price Index finishing down yesterday. 

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