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Asian airline stocks rebound but volatile time ahead

Analysis

Asia Pacific airline stocks rebounded yesterday after Tuesday's rout, but gains are likely to be short-lived following difficult sessions in Europe and the US overnight.

Summary
  • Asia Pacific airline stocks rebounded after a previous decline, but gains may not be sustained due to difficult sessions in Europe and the US.
  • The Association of Asia Pacific Airlines (AAPA) expects short-term disruption to travel demand to and from Japan.
  • IATA states that the Japanese market is large enough to have a materially adverse impact on international travel.
  • Japan is a significant market for premium travel, representing 6-7% of the global total.
  • Uncertainty in global financial markets is expected to disrupt travel patterns to and from Japan.
  • The specific movements of Asia Pacific airline stocks on 16-Mar-2011 are not provided.

The Association of Asia Pacific Airlines (AAPA) stated it expects "some short-term disruption to normal patterns of travel demand to and from Japan", while IATA stated the Japanese market is "large enough to have a materially adverse impact on the international total for that month [Mar-2011]".

IATA stated: "Japan has been a relatively slow growth mature economy in the Asia Pacific region, but premium travel is significant since Japan is still the third largest economy in the world. Japanese markets represent 6-7% of the global total."

See related report: Uncertainty prevails in global financial markets. Travel patterns to be disrupted: Japan Update #5

Asia Pacific airline share movements: 16-Mar-2011

APAD

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