JAL jumps on American & Delta talks, double-digit growth in India’s domestic market

Japan Airlines' shares soared 8.0% yesterday, the largest single day jump in 11 months to become the top performing stock on the benchmark Nikkei average (which fell 2.3% yesterday), on news that American Airlines and Delta Air Lines are considering rival investments in the struggling carrier to secure partnership ties and boost revenue from Asia.

See related report: Delta Air Lines’ Japanese (and Asian) dilemma

Double-digit growth in India’s domestic market

Meanwhile, Indian airlines reported double-digit domestic passenger growth in Aug-2009, driven by strong growth at the country’s LCCs, with domestic passenger levels up 26% year-on-year to 3.7 million.

During the month, IndiGo and SpiceJet both increased their market shares, to 13.9% and 12.3%, respectively, driven by passenger growth of 69.5% and 81.0%, respectively (to 505,000 passengers and 447,000 passengers, respectively), with GoAir traffic soaring 162% (to 207,000 passengers).

Jet Airways was the only major carrier to report a decline in passenger numbers (-3.1% year-on-year) - and worse is expected this month following the five-day pilot strike. Also losing market share last month was Air India and JetLite.

According to the DGCA, all carriers experienced higher load factor in the month. However, yields remain are under considerable pressure in India.

SpiceJet's shares were down 2.9% yesterday, with Kingfisher also lower (-0.5%), while Jet Airways was up 2.2%.

Cathay slips

Cathay Pacific shares slipped 1.2% yesterday, upon the release of the carrier’s Aug-2009 results. During the month, Cathay experienced a 3.8% increase in passenger numbers to 22 million, with load factors also improving, up 5.7 ppts to 84.1%, with the carrier stating it has seen a “strong recovery in pent-up regional demand for the month with an abating H1N1 impact”.

However, year-on-year comparisons are “skewed” due to the dampening of demand on Mainland China routes over the 2008 Olympic period. The carrier also stated that premium traffic remains “weak” and at “materially lower yields”. See related report: China Airlines and EVA Air’s yields remain depressed, Cathay’s yields “materially lower”.

Asia Pacific selected airlines daily share price movements (% change): 14-Sep-09