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China Southern to take delivery of first A380 in Aug-2011, Cathay reduces Japan capacity

Analysis

China Southern Airlines confirmed it expects to take delivery of its first of five A380s in Aug-2011. The aircraft will initially be deployed on services from Beijing, though destinations were not disclosed.

Summary
  • China Southern Airlines to receive its first A380 in August 2011, with plans to deploy it on services from Beijing.
  • China Southern expects to have 461 aircraft in its fleet by the end of 2011, compared to 422 at the end of 2010.
  • Japan crisis has minimal impact on China Southern, with routes to Japan accounting for only 2% of its total capacity.
  • Cathay Pacific plans to reduce capacity to/from Japan from April 1 to April 15, 2011, due to weakening passenger demand.
  • Cathay Pacific will operate fewer daily services to Tokyo, Osaka, Nagoya, while services to Fukuoka and Sapporo remain unaffected.
  • Shares in China Southern and Cathay Pacific experienced a decline of 4% and 0.1% respectively.

China Southern expects to end 2011 with 461 aircraft in its fleet, compared to 422 as at 31-Dec-2010. The airline will take delivery of one additional B777-200LRF later this year, for a total of six. China Southern has not been badly affected by the Japan crisis, with routes to Japan accounting for just 2% of its total capacity.

Cathay Pacific meanwhile announced plans to reduce capacity to/from Japan from 01-Apr-2011 to 15-Apr-2011 in response to weakening passenger demand. At present, Cathay Pacific operates seven daily services to/from Tokyo. After the planned temporary suspensions, the airline will operate four times daily to Tokyo and five times daily from Tokyo; four times daily to Osaka and three times daily from Osaka; and two times daily to/from Nagoya. Services to Fukuoka and Sapporo are not affected.

A Cathay spokesman said, "At the moment we expect several months of weakness with a recovery towards the summer, but there are still a lot of variables out there that might alter this view going forward".

Shares in China Southern and Cathay Pacific fell 4% and 0.1%, respectively, yesterday.

Selected APAD daily share price movements (% change): 30-Mar-2011

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