Hong Kong (Thomson Financial) - Shares in Cathay Pacific Airways Ltd. and three other Hong Kong airline companies fell on
Tuesday after crude oil prices topped $120 a barrel, sparking fears of rising operating costs.
"Rising crude prices always give investors an excuse to avoid airline stocks because this means higher operating costs," said Conita Hung, research head at Delta Asia Securities. Cathay shares dropped 0.7 percent to HK$16.94 and Air China Ltd. was down 2 percent at HK$6.41. China Southern Airlines slumped 4 percent to HK$5.47 and China Eastern Airlines Corp. was down 2.9 percent at HK$3.75.
Crude oil futures for June delivery surged to a new trading high of $120.36 a barrel on the New York Mercantile Exchange on Monday before falling back slightly to settle at a record $119.97, up $3.65, on worries over supply disruptions in Nigeria, Iran and Iraq.