Japan Airlines and Asiana Airlines shares plunge again on uncertain outlooks

Shares in Japan Airlines plunged for a second day on Wednesday, losing nearly a quarter of its value as investor fears intensified that the airline could be headed towards bankruptcy protection. JAL’s shares slumped 23.9% yesterday to another all-time low, following the previous day’s 8.3% reduction.

Significant trading volume in JAL shares 

Trading volume was significant again yesterday, with 398 million shares changing hands, more than 21 times the daily average over the past year. On Tuesday, 133 million shares changed hands (compared with a daily average over the past years of 17.1 million shares).

Debt problems at Asiana Airlines’ parent

Asiana Airlines’ shares also lost significant ground yesterday, slumping 7.0% - its largest reduction since 17-Feb-2009 - as parent, Kumbo Asiana Group, stated it may request creditors to restructure the debt of some of its 48 affiliates. 

Rival Korean Air’s shares gained 4.0% yesterday.

China Eastern/Shanghai merger progressing

Also in North Asia, shares in China Eastern Airlines and Shanghai Airlines were down slightly (-0.4% and -0.3%, respectively) yesterday, as the carriers received approval from China Securities Regulatory Commission (CSRC) regarding the absorption of Shanghai Airlines by China Eastern. 

Kingfisher Airlines in negotiations to acquire USD400 million in funding from private equity groups

In India, Kingfisher Airlines (shares up 1.0% yesterday) stated it is in negotiations to acquire USD400 million in fresh funding from private equity investors including Carlyle, TPG and Abu Dhabi-based Aabar Investments. The funds would be used to retire debts.

Asia Pacific selected airlines daily share price movements (% change): 30-Dec-2009