Virgin Blue continues remorseless slide; Cathay Pacific fall accelerates rapidly last week
Asia Pacific airlines price movements (% change): 06-Mar-09
Last month, reporting on a still-profitable six months to 31-Dec-08, Virgin Blue CEO Brett Godfrey noted the airline was operating in "an exceptionally challenging and historically unprecedented operating environment". The entry of V Australia onto the Pacific route is confronting severe headwinds as demand slips and competitor Qantas cuts its lowest discount fares to about a third of the pre-V Australia announcement levels.
Virgin Blue Share price: 02-Jan-09 to 06-Mar-09
The situation is not helped by a need for restructuring of the carrier's shareholding, where Virgin Group holds a veto-controlling 25.5% and is unlikely to withdraw at current price levels.
Cathay Pacific meanwhile is also undergoing a vertigo-challenging slide this year, after already seeing its capitalisation halved last year.
A further slide of almost HKD2, from its previous level just below HKD10 in early Jan-09 to around HKD7 on Friday, appears to be accelerating, as it shed nearly HKD1.50 of that in the week ending 6-Mar-09. The combined effects of a slumping cargo market - down more than 20% in January - a large increase in capacity last year, and the erosion of premium traffic have seriously wounded the Hong Kong market.
Cathay Pacific Share price: 02-Jan-09 to 06-Mar-09