10-Dec-2009 12:57 PM

Japan Airlines' traffic weakness continues, Hainan Airlines cargo volume soars

JAL reported continued passenger and cargo volume reductions in Oct-2009, with domestic passenger numbers slumping 23.9% to 3.3 million, and international passengers falling 4.5% to slightly under 1 million.

International load factors however gained 9.4 ppts to 75.1% in the month, as the airline continued to slash capacity, although domestic load factors were down notably (-7.0 ppts to 63.2%). Cargo volume was also down in both the international and domestic markets, by 7.7% and 6.9%, respectively.

JAL to hold back year-end bonuses across-the-board in 2009

In other news, JAL’s largest labour union has reportedly accepted a management proposal to forego year-end bonuses for 2009, according to the Nikkei Business Daily. Seven other JAL unions also expected to agree to give up year-end bonuses, meaning the struggling carrier will hold back the payouts across-the-board for the first time since its privatisation in 1987.

Japan Airlines’ shares dropped 3.9% yesterday, outpacing a 1.3% reduction in the benchmark Nikkei 225.

Hainan Airlines cargo volume soars in Nov-2009

Hainan Airlines’ shares were down 2.3% yesterday, as the carrier reported a 17.7% jump in passenger numbers to 1.5 million in Nov-2009, with load factors slipping slightly (-0.6 ppts) to 78.2%. Cargo volume soared 63% in the month.

Jetstar to significantly grow domestic operations; increasing importance of Jetstar to the Qantas Group

Qantas’ shares slipped 3.7% yesterday, ahead of an announcement today by its LCC subsidiary, Jetstar, of plans to significantly grow its domestic Australian operations between Mar-2010 and Jul-2010 by introducing an additional 700,000 new seats p/a to select destinations.

The LCC plans to introduce 77 new weekly services as it takes delivery of four new A320 aircraft, predominantly from its Melbourne and Sydney hubs to key leisure destinations, including the Gold Coast, Sunshine Coast, Cairns, Newcastle and Tasmania.

Jetstar CEO, Bruce Buchanan stated the increased capacity would increase its market share by approximately 18% and passenger numbers by 7% year-on-year. The move comes as rival Tiger Airways reported heavy losses in Australia for the 12 months ended 31-Mar-2009.

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