Loading

China Eastern Dec-2010 preliminary traffic up 50%; Indian carriers trade lower

Analysis

China's aviation boom continues, with China Eastern Airlines reporting a remarkable 50% increase in Dec-2010, according to preliminary figures. The carrier reported an average load factor of 76.8%, 6.2ppts higher than the same month in 2009.

Summary
  • China Eastern Airlines reported a 50% increase in traffic in December 2010, with an average load factor of 76.8%.
  • The carrier's 2010 traffic was up 47% compared to the previous year, with the highest passenger load factor since 2000.
  • Hainan Airlines became the first mainland Chinese carrier to earn five-star certification from SkyTrax, but its shares still dropped by 3.5%.
  • Other mainland Chinese carriers, including China Southern Airlines, also experienced a decline in share prices.
  • Indian carriers, such as Kingfisher Airlines, Jet Airways, and SpiceJet, saw their shares decrease, with Kingfisher Airlines facing potential higher insurance premiums.
  • The Indian Directorate General of Civil Aviation reclassified a failed landing incident as an accident, potentially leading to increased insurance costs for Kingfisher Airlines.

The carrier's 2010 traffic was up 47% on the previous year. China Eastern stated its annual passenger load factor of 78.0% in 2010 was the highest since 2000, while cargo load factor of 60.3% was the highest since 2003.

China Eastern Airlines' shares were down 1% on Friday, with most other mainland Chinese carriers also trading down. Hainan Airlines shares lost 3.5% - despite the announcement that the carrier has become the first mainland carrier to earn five-star certification from SkyTrax. China Southern Airlines' shares were down 2.3%. Shandong Airlines shares eased 0.4%, while Air China was up 0.1%.

Elsewhere in Asia, shares in India's listed carriers were lower, with Kingfisher Airlines dropping 5.2%, Jet Airways down 4% and shares in SpiceJet lower by 2%. Kingfisher Airlines, now the second-largest carrier in India, reportedly faces risks of higher insurance premiums, following a decision by the Indian Directorate General of Civil Aviation (DGCA) to reclassify the Nov-2009 failed landing of an ATR turboprop in Mumbai from an "incident" to an "accident". Kingfisher's aircraft insurance premiums could increase by 5-10%, according to a report in Live Mint.

Selected Asia Pacific airlines daily share price movements (% change): 14-Jan-2011

APAD

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More