EVA Air share rating cut by UBS; Kingfisher announces new CEO, plans to restructure debt

Shares in EVA Airways fell the most in three weeks in Taipei trading, closing the day down 4.2% as the carrier was cut from "buy" to "neutral" by UBS, citing the stock’s recent rally. The brokerage raised its share-price estimate from TWD26.80 to TWD28.

Asiana Airlines, Korean Air Lines benefit from strong currency

Shares in South Korea’s airlines, Asiana Airlines and Korean Air Lines, outperformed the market yesterday, on the back of the Korean won’s recent strength, which lifts demand for overseas tours and reduces the cost of items such as aviation fuel, aircraft purchases/leases and some interest payments.

Meanwhile, Korean Air Lines reportedly plans to raise approximately USD480 million from a sale of asset-backed. The carrier reportedly hired Standard Chartered Plc to help sell the notes, which will be backed by future ticket sales. The airline, which reportedly has KRW781 billion (USD686 million) of bonds and loans due this year, reportedly plans to sell the notes in Nov-2010.

ANA changes 15 B787-8 orders to B787-9s; Xiamen Airlines orders 10 B737s 

Also in North Asia, ANA (shares down 1.0%) announced plans to change 15 of its 55 orders for the B787-8 to the B787-9 model.  In other fleet news, China Southern Airlines announced that Xiamen Airlines, a 60% owned subsidiary of the company, entered into an agreement Boeing to purchase 10 B737 aircraft for delivery in 2015 and 2016. 

Hainan Airlines to launch USD747m equity fund for aircraft leasing

Hainan Airlines announced plans to launch China's first private equity fund that invests in the aircraft leasing industry. Hainan Airlines will launch the fund with Tianjin Yanshan Investment Management Co, a controlled subsidiary of Hainan Airlines Group, and aims to raise CNY5 billion (USD747 million). The company will target an annualised investment return of at least 10%. Shares in Hainan Airlines gained 0.9% yesterday.

Kingfisher announces CEO and plans to restructure debt

Shares in Jet Airways slipped 1.2% yesterday, despite Nimbus Wealth Management commenting that the carrier’s shares are a good pick, with the share price moving strongly and “continuously going up”. Shares in Kingfisher Airlines gained 1.2% as Nimbus HWealth placed a "buy" rating on the carrier’s stock, stating its shares are on an “upward trend right now”. 

Meanwhile, shares in Kingfisher Airlines gained 1.2% as the carrier announced the appointment of former SpiceJet CEO Sanjay Aggarwal as CEO of the company with immediate effect.

Separately, the carrier received a sanction from the Reserve Bank of India to conduct a debt restructuring exercise to work with a consortium of banks to restructure Kingfisher’s entire INR600 crore (USD134.9 million) debt and also convert 30% of the carrier’s total debt into capital. A loan of INR735 crore (USD165,1 million) from the carrier’s parent company, UB Holdings, would also be converted into equity.

Under the restructuring plan, Kingfisher expects to clear its debts within the tenure of nine years, including a two-year moratorium. Once the debt restructuring is complete the carrier plans to raise approximately USD1 billion in funding, including a USD250 million GDR issue. Kingfisher also announced plans to expand its fleet by 2012 and to apply for additional international services.

Also up strongly yesterday was Thai Airways, with a share price gain of 7.7%, near its highest level since 2007.

Asia Pacific selected airlines daily share price movements (% change):  30-Sep-2010