JAL seeking fourth state bailout since 2001; AirAsia expecting yield and load factor improvements

Japan Airlines’ shares gained 1.7% on Friday (30-Oct-2009), as the carrier seeks its fourth state bailout since 2001.

Japan Transport Minister, Seiji Maehara, is heading a new team overseeing the restructuring of the carrier, with the team to consider such issues as giving government guarantees on JAL loans and reducing the cost of pensions for JAL employees. The team may also opt to inject public money into the carrier. 

Japan Airlines International Company downgraded by Moody’s

Also on Friday, Moody’s lowered Japan Airlines International Company from ‘B1’ to ‘CAA1’ and put the company under review for further possible downgrade. Moody’s stated the downgrade reflects increasing concerns over leverage, pension liabilities and inefficient service network. Moody’s added that the risk of debt restructuring has increased, which would further result in ratings downgrades, depending on the level of losses incurred by lenders.

ANA projects larger than expected FY2010 losses; EVA Air and China Airlines report narrowed losses in nine months to Sep-2009

Also in North Asia, ANA rose 0.4% at the close of trading in Tokyo, after dropping 20% so far in 2009 (compared with a 45% decline for JAL), after reporting a 2Q2010 profit, but losses in the 1H2010 period. The carrier also downgraded its FY2010 outlook, with full year losses expected to widen.  

Shares in Taiwan’s largest carrier, China Airlines, were down 1.0% on Friday, after the carrier reporting a narrowed loss of USD150 million in the nine months ended Sep-2009. Taiwan’s second largest airline, EVA Airways, also reported a narrowed loss of USD117 million in the nine-month period. The carrier’s shares price was unchanged on Friday. 

AirAsia expecting load factor and yield improvements

AirAsia CEO, Tony Fernandes, stated that due to “green shoots” of recovery in the economy, yields are expected to improving moving forward. Mr Fernandes added the carrier’s load factor should remain strong in 2010, after reporting a load factor of 75% for 2Q2009. 

According to Mr Fernandes, “our business is great. Our passenger numbers are up even during the puasa (fasting) month. Ancillary incomes are coming up very fast and we’re getting rights to many destinations”. Ge added, “even if it [fuel prices] reaches USD100 per barrel we’re ready for it. We are okay at the moment…Fuel price is a fake price. Eventually it [price] will settle on real demand”.

Jetstar to launch service to Europe, but not in direct competition with AirAsia X: Qantas CEO

Meanwhile, Qantas CEO, Alan Joyce stated that although Jetstar plans to launch services to Europe in the future, it has no plans to launch services to London in direct competition with AirAsia X.

Indian jet fuel prices increases

Shares in Kingfisher Airlines and Jet Airways were down by 6.3% and 4.2% on Friday (SpiceJet was up 0.4%) as Indian Oil Corp (IOC), Bharat Petroleum Corp and Hindustan Petroleum increased Indian jet fuel prices by approximately 8.7%, effective 01-Nov-09. The increase follows three consecutive fortnightly decreases.

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