Cathay Pacific, Qantas and Japan Airlines up, Singapore Airlines and Virgin Blue steady - Share Wrap

Asian airline shares mostly underperformed local indexes yesterday, reflecting investor concern over rising fuel prices, which reached a new high for 2009 yesterday. For the second day in a row, crude prices closed above USD70 per barrel in New York. A weaker close on Wall Street could also trigger some selling in Asia today.

Qantas shares were up 1.8% yesterday, falling short of the 2.3% increase on the Australian Stock Exchange. Qantas CEO, Alan Joyce, yesterday stated the airline would save AUD1 billion (USD805 million) in capital expenditure in the upcoming financial year by delaying aircraft deliveries, adding to the carrier's current cash balance of approximately AUD3 billion (USD2.4 billion). The CEO added that Qantas Group's two-brand strategy was delivery an advantage for the group, although both brands were performing "very differently": Jetstar is having a record year, while Qantas is suffering as premium traffic on long-haul routes contracts by 20-30%.

An Airbus A330-200 operated by Qantas offshoot, Jetstar, was involved in an incident last night. Virgin Blue shares remained steady yesterday, after falling 4.6% on Tuesday.

Japan Airlines and ANA both reported a 0.6% increase yesterday, once again underperforming compared to the rest of the market.

Cathay Pacific shares rose 4.4% yesterday, with the Hong Kong-based carrier the sole airline in the region to outperform the local index - but only just. Hong Kong's Hang Seng Index shot up 4.1% yesterday.

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Asia Pacific selected airlines daily share price movements (% change): 10-Jun-09