EVA Air, China Airlines soar on Mainland investment hopes – SHARE WRAP

EVA Air and China Airlines gained 7% as the broader Taiwan Taiex index soared 6.7% yesterday on improving relations with the Mainland. Taiwan’s Supervisory Commission stated it would allow certain Mainland institutional investors to apply to invest in Taiwanese companies.

Last weekend, Taiwan and Mainland China signed an expanded agreement on direct cross-Strait services this Summer, involving an increase in total passenger services from 108 to 270 per week, as well as 28 cargo frequencies. A doubling in frequencies was previously seen as a good outcome by industry participants, so the almost trebling in capacity has been a welcome development for both sides (and more bad news for Cathay Pacific/Dragonair/Air Macau). Six new destinations were added in Mainland China (Hefei, Harbin, Nanchang, Guiyang, Ningbo and Jinan) increasing the total to 27.

Elsewhere, Malaysia Airlines jumped 5.7%, Singapore Airlines added 3.9% and Korean Air rose 3.4%, but China Southern eased 0.5% and Air NZ was 1.9% lower.

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Asia Pacific selected airlines daily share price movements (% change): 30-Apr-09