Markets positive on Asian airlines; Qantas international yields increase

IATA, in its July-August Airlines Financial Monitor, commented that “markets are positive on Asian and US airlines but European airline share prices are lagging”.

See related article: Airline shares strengthen; Improvement in average fares and profitability: IATA

Qantas domestic yield still weak; international yields increase in Jul-2010

Shares in Qantas gained 2.4% yesterday but are 2.0% weaker in morning trading, as the carrier reported a 1.3% reduction in domestic (Qantas, QantasLink and Jetstar Domestic operations excluding foreign exchange) yield for Jul-2010. However, international yield Qantas and Jetstar International operations (excluding foreign exchange) increased 11.4% year-on-year in the month.

Also in the month, the carrier reported a 9.1% increase in Group passenger numbers to 3.8 million, with an average load factor of 82.5% (-0.4 ppts). All airlines within the group reported passenger growth in the period, while only Jetstar International and Jetstar Asia reported load factor growth in the month.

Skymark shares decline following recent gains

Meanwhile, shares in Japanese LCC, Skymark Airlines, slipped 4.7%, after considerable recent share price gains for the LCC. For example, the carrier’s share price increased 9.6% on Friday, preceded by 8.8% growth last Thursday. Skymark is now the only airline other than ANA to be listed on the Tokyo Stock Exchange now that JAL is no longer listed.

The carrier has also performed strongly financially, with a first quarter revenue increase of 19% and full year net profit forecast at USD29 million, with this result partly reflecting the achievement in efficiencies from its fleet restructuring.

The carrier will also benefit from Haneda’s expansion, which give the carrier additional domestic frequencies (eight slots), with the carrier also gaining from JAL’s withdrawal on some domestic routes. For example, Skymark will increase its network with the addition of five new routes out of Kobe airport later this year. The carrier’s crew shortage problems have also now been resolved, with Skymark now recruiting ex-JAL pilots.

China Eastern’s absorption of Shanghai Airlines approved

Also in North Asia, China Eastern Airlines’ shares gained 1.5% yesterday, following the previous day’s intra-day gain of 3.1%, which marked the largest intra-day advance in two weeks.

The carrier, meanwhile, yesterday announced that the absorption of Shanghai Airlines Co Ltd through a share exchange has been approved by China Securities Regulatory Commission. 

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