Qantas posts first half year loss in six years; Air China tumbles following Cathay Pacific
Air China shares tumbled nearly 10% in early trading yesterday, closing down 2.0% at end-of-day trading, on concerns that the carrier may have overpaid in increasing its stake in Cathay Pacific.
Cathay Pacific closed the day up 1.4%, rebounding from early trading declines. See related report: Air China-Cathay Pacific move to shake up Star Alliance and oneworld
Meanwhile, Qantas shares gained 2.8% yesterday, prior to the release of the carrier’s full year financial release this morning, with shares opening up 5.8% in very early trade. The carrier reported its first half-year loss in six years (and only the second half year period of unprofitability since 1995), dragging down the carrier’s full year net profit by 88% to AUD117 million and annual pre-tax profit by 87% to AUD181 million. Revenue was down 7%, driven by a 20% reduction in freight revenue and a 9% reduction in passenger revenue.
CEO, Alan Joyce described the current conditions as the "most volatile and challenging time for the world's aviation industry". However, the carrier stated that there are signs of an improvement in passenger volumes and yields have stabilised at the levels experienced in 2H2009. The carrier also continues to benefit from its two-brand strategy, which helped the company remain in the black “when most airlines are reporting losses”. The carrier is also continuing with its cost reduction focusing, announced a new three-year programmed aimed at cutting costs by AUD1.5 billion, including AUD500 million in the current fiscal year. See related report: Jetstar and FFP save Qantas mainline as operating losses touch AUD30 million a month
Asia Pacific selected airlines daily share price movements (% change): 18-Aug-09