22-Dec-2009 12:22 PM

China Airlines cargo yields boosted by pre-Christmas cargo rush; Air New Zealand yields remain weak

Analysis

Shares in Taiwan's China Airlines remained stable yesterday, with EVA Air's shares falling 0.7%, despite the carriers reporting their first cargo yield improvements in 11 months in Nov-2009 (up 2.6% and 1.8%, respectively).

Summary

Taiwan's China Airlines and EVA Air report first cargo yield improvements in 11 months.
Air New Zealand experiences weak but improving yields, impacted by B787 delays.
Qantas expects to report profit in the AUD50-150 million range for 1HFY2010.
Singapore Airlines and Temasek Holding to maintain shares in Tiger Airways following IPO.
Japan Airlines and ANA stocks decline due to resurgent fuel costs.
SpiceJet CEO expects current quarter to be the best for the Indian aviation industry, while the Indian government considers allowing foreign airlines to invest in domestic carriers.

Passenger yields, however, remained weak, but are showing signs of improving, down 16.5% at China Airlines and 14.1% weaker at EVA Airways. See related report: China Airlines and EVA Air's cargo yields boosted by pre-Christmas cargo rush

Air New Zealand yields remain weak, but improving; feeling the impact of B787 delays

Air New Zealand's shares were down 1.7%, ahead of the release of the carrier's Nov-2009 traffic results today (22-Dec-2009). During the month, the carrier reported continued yield reductions, but load factors improved in the month (+5.4 ppts). Passenger numbers slipped slightly, down 0.6% to 951,000. See related report: Air New Zealand's long-haul yields still struggling

The carrier's CFO, Rob Fyfe, also stated that the carrier has been "more greatly affected by delays in the B787 than the global financial downturn", as the carrier has been forced to adjust its strategy and review all aircraft leases.

Qantas expecting 1HFY2010 profit

Qantas' shares surged 5.1% yesterday, rising the most in six months in Sydney trading, after the carrier stated it expects to report profit before tax in the AUD50-150 million (USD44-133 million) range in the six months ending 31-Dec-2009, following recent improvements in passenger numbers and yields. See related report: Qantas expects AUD50-150 million profit in 1HFY2009/2010; Yields on the improve in Nov-2009

Singapore Airlines to maintains shares in Tiger Airways following IPO

Singapore Airlines' shares gained 0.3%, after a draft prospectus revealed that the airline and state investor, Temasek Holding, would not sell their shares in Tiger Airways in its planned IPO. Indigo, which currently has a 24% stake in the carrier, will divest part of its stake through the sale, while RyanAsia Ltd plans to decrease its stake if an over-allotment option is conducted.

The LCC has lodged a preliminary prospectus with the Monetary Authority of Singapore regarding its plans to launch an IPO, to acquire funding for its USD4.8 billion aircraft order for 66 A320s.

Japan air transport sector takes a dive on resurgent fuel costs

Resurgent fuel costs saw Japan's air transport sector take a dive, with Japan Airlines falling 2.0% and ANA 1.2%, despite Japan's 225-issue Nikkei Stock Average reaching an eight-week high yesterday.

ANA announced an order for five B777-200ER (for delivery between Apr-2012 and Mar-2014) and five B767-300ER aircraft (for delivery between Apr-2010 and Mar-2012). The carrier's President, Shinichiro Ito, confirmed ANA and its Star Alliance partners, United Airlines and Continental Airlines, would file for antitrust immunity with US authorities this week.

SpiceJet expects current quarter to be the "best quarter for the aviation industry"

Subsequent to the close of the stock market yesterday, SpiceJet CEO, Sanjay Aggarwal, stated 3QFY2009/10 (Oct-2009 to Dec-2009) is expected to be the "best quarter for the Indian aviation industry in terms of demand", following improvements in Oct-2009 and Nov-2009.

Meanwhile, the Indian Government is reportedly considering plans to permit foreign airlines to invest in Indian domestic carriers.

Despite this, shares in India's listed airlines, Kingfisher, SpiceJet and Jet Airways, were all weaker yesterday, down 2.2%, 1.7% and 1.3%, respectively.

Asia Pacific selected airlines daily share price movements (% change): 21-Dec-09