Airline Finance News - Asia / Pacific

AirGuide Business, July 14, 2008

7/14/2008

Air China

Air China and China Eastern Airlines declining volume has compounded headaches from higher fuel prices, which boosted operating costs, and marks a rare reversal for an industry that has been buoyed in recent years by China's strong economic growth. For the first half of the year, Air China carried 16.56 million passengers, down 0.8 percent year-on-year, while China Eastern's passenger volume slipped 1.23 percent to 18.11 million, the airlines said in separate statements. 7/16/2008

Air China

Air China reported a 4.9 percent slip in cargo volume in June to 74,509 tonnes, while China Eastern's freight volume fell 5.9 percent to 69,400 tonnes. Air cargo demand has boomed in China, fueled in part by flourishing overseas trade, although export growth slowed substantially in June due to global economic weakness and the appreciation of China's yuan. 7/16/2008

Air China

Air China, the country's flag carrier, flew 2.67 million passengers in June, down 7.5 percent year-on-year, with volume on international routes down 15.5 percent while domestic traffic fell 5.3 percent. China Eastern's passenger volume fell 11.6 percent to 2.75 million in June, with international service down 24.6 percent and domestic service shrinking 9.7 percent. 7/16/2008

Air China

Air China Board Secretary Huang Bin acknowledged Air Macau's request for help and said Air China will determine a solution with other Air Macau stakeholders, including TAP Portugal's SEAP investment fund (15%), casino company Sociedade de Turismo e Diversoes de Macau (14%), the Macau government and EVA Air. Air China holds a 51% stake. In a company statement cited yesterday by the Macau Daily News, Air Macau said it has reached a strategic cooperation agreement with Air China and that aid will be extended soon. 7/15/2008

Air China, Austrian Airlines

Air China has cast an eye on the possible sale of a stake in loss-making carrier Austrian Airlines by the Austrian government, an Austrian magazine reported on Wednesday. Austrian magazine NEWS quoted Air China acting Chairman Kong Dong as saying he would look at a possible Austrian sale. The Austrian government has hired advisers to look at possible buyers for parts or all of its 43 percent stake in Austrian. 7/16/2008

Air Macau

Air Macau has become another victim of surging oil prices and is clinging to survival as it awaits help from parent Air China Group. According to China Business News, the Macau carrier posted a net loss in excess of MOP200 million ($24.6 million) in the first six months of this year, more than half of its registered capital of MOP400 million. Under Macau law, exceeding that threshold requires the company to either inject new capital or declare bankruptcy. 7/15/2008

CAAC

Chinese carriers experienced declining market demand in June owing to slowing domestic economic growth and the continuing effect of natural disasters, according to CAAC. Passenger numbers fell 3.8% year-over-year to 14.2 million and load factor was down 2.1 points to 72.3%. Daily utilization dropped sharply, falling 10.5% to 8.5 hr. due to route cancellations caused by rising fuel prices. Half-year passenger numbers grew 5.4% to 91.8 million and load factor remained level at 74.1%. Utilization rate fell 6.3% to 9 hr. The fleet numbered 1,192 aircraft as of June 30, an increase of 11 during the month. 7/16/2008

CAAC

Chinese industry executives have said they expect a pick-up in air traffic again in September, when airport security checks return to normal. Chinese carriers have also raised domestic jet fuel surcharges by up to 50 percent from July 1 to offset pressure from high oil prices. Surcharges for international service will be raised by more than 30 percent from July 10. A dull global economy was also blamed by several airline executives for slowing international air traffic. 7/16/2008

Cathay Pacific Airways

Cathay Pacific Airways said Monday it carried 13% more passengers in June than it did in the same month last year due to new capacity. 7/14/2008

China Eastern Airlines

China Eastern Airlines remains confident in its plan to introduce Singapore Airlines as its strategic investor despite the fact that the exclusive stake sale agreement signed with Singapore Air last September will be invalid after Aug. 9. China Eastern Board Secretary Luo Zhuping said. Those shareholders rejected SIA's purchase of a 24% stake in January. In May, China Eastern hinted it might schedule another shareholder vote following the conclusion of next month's Olympic Games. However, the Shanghai-based carrier did not discuss the stake sale at its annual shareholders conference June 30 except to note that "it will continue to push forward introducing a strategic investor." Industry analysts have said that if both China Eastern and Singapore Air still wish to cooperate, they may sign a new agreement to extend the validity of their previous deal. So far Singapore Air has remained largely silent, saying it maintains contact with China Eastern senior management but that discussion tends to center on future commercial cooperation. 7/7/2008