Chinese airline shares stronger on rising yuan; Golden Week traffic soars; Korean carriers weak

Shares in mainland Chinese carriers soared on Friday as trading resumed after a week-long National Day holiday. China Southern, Hainan Airlines, Air China and China Eastern were all stronger on Friday, with the airlines continuing to benefit from a rising yuan as it lowers the value of their dollar-denominated debt, boosting income.

China’s stocks have gained the most in four months after Moody’s Investors Service put the nation’s debt rating on review for a possible upgrade, with retail sales surging and the yuan climbing to its strongest against the dollar since 1993.

CAAC reported a 24% year-on-year jump in air traffic to 5.8 million passengers during the National Day Golden Week, between 01-Oct-2010 and 07-Oct-2010, with an average load factor of 81.5%. According to CAAC, the nation’s airlines operated 39,112 flights, an increase of 5.3%.

Also in China, Hainan Airlines reported a 4.9% increase in passenger numbers to 1.5 million passengers, with load factors gaining 9.3 ppts to 83.4% in Sep-2010. Cargo volumes decreased slightly (-0.2%) to 27.214 tonnes. 

Also in the North Asia market, shares in Korean Air and Asiana Airlines were weaker on Friday, declining 4.7% and 1.5%, respectively, reflecting overall weakness of Korean stocks, which closed 0.2% lower as foreign investors and institutions cashed in on recent gains. Airlines and shipping companies, particularly, lost ground after enjoying strong gains in recent sessions. 

Asia Pacific selected airlines daily share price movements (% change):  08-Oct-2010