ANA, Skymark and Korean Air to benefit from JAL bankruptcy: SHARE WRAP

Japan Airlines’ shares slumped 12.5% on Friday, following a 14.3% gain on Thursday, on news that Asia’s largest airline by revenue will file for bankruptcy protection as early as tomorrow (19-Jan-2010), as part of a restructuring programme being crafted by the state-backed Enterprise Turnaround Initiative Corp of Japan (ETIC)

See related report: JAL-Delta rumours strengthen. But does Washington agree?

Meanwhile, shares in ANA were down 1.0% on Friday, but remain at near six-month highs, as investors consider that Japan’s second largest airline will gain from the expected bankruptcy and restructuring of JAL. Shares in Japanese LCC, Skymark, also gained on Friday, up 8.0%. Skymark’s stock market value is now higher than JAL’s. See related report: Japan’s forgotten airlines: the Japanese LCC segment

Meanwhile, Korean Air’s shares gained 2.6% on Friday, on speculation that the carrier will also benefit from the imminent JAL bankruptcy, with the carrier also gaining from a stronger Korean Won and a rebounding Korean economy. Shares of Korean Air closed at KRW60,200 on Friday. Daewoo Securities set a target price on KAL's shares of KRW74,000.

Asiana Airlines also closed higher, up 3.7% to KRW3,895, with Daewoo Securities targeting the stock to reach KRW5,000. Daewoo Securities expects Asiana to post an operating profit in 4Q2009, adding that South Korea’s second largest airline “has and will benefit from improving economic conditions and the strengthening of the local currency as more Koreans travel overseas this year". It added, despite Kumho Asiana Group's trouble, Asiana will likely see improved earnings down the road.''

China Eastern expects full year profit in 2009

China Eastern Airlines’ shares remained stable on Friday, as the carrier stated it expects to report a FY2009 profit, compared to a loss of CNY13,928 million (USD2,040 million) in the previous corresponding period, due to favourable fuel hedging from lower fuel costs and a recovery in the aviation industry.

Air China receive capital injection for Air China Cargo acquisition

Air China’ shares gained 3.8% on Friday, as China National Aviation Holding Co, the controlling shareholder of Air China, received CNY1.5 billion (USD219.6 million) in grants from the Ministry of Finance, which will be injected in Air China for its proposed acquisition of Air China Cargo Co Ltd. The acquisition is still subject to relevant regulatory approval.

For all this and more coverage of today's Asia Pacific aviation developments, see Asia Pacific Airline Daily.

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