Airline Finance News - Asia / Pacific

AirGuide Business, July 21, 2008

7/21/2008

New Zealand's competition watchdog has filed criminal charges against Singapore Airlines, Cathay Pacific and Aerolineas Argentinas for not providing information sought as part of its investigation into alleged air freight price-fixing, it said on Wednesday. The Commerce Commission said it was investigating allegations that some airlines had colluded and reached agreements on cargo rates, including international fuel surcharges, on flights to and from New Zealand. It said it had ordered the three airlines to provide information for its investigation by a specific date in November, but they had not complied. Charges had been filed with the District Court and the firms could be fined up to NZD$30,000 (USD$23,077) each if found guilty. 7/16/2008

Air travel in China is forecast to grow by nine per cent annually in coming years, driven by a boom that saw the country's economy grow by 10.6 per cent in the first quarter. Air China's first-quarter profits jumped 147 per cent, helped by the travel boom and the rise of China's currency, the yuan, against the U.S. dollar. Chinese carriers benefit from a stronger currency because they pay dollars for fuel. Regulators are reportedly considering plans to restructure China's airlines to make them more efficient and able to compete with bigger, richer foreign carriers. Air China is trying to establish itself as the dominant carrier amid a struggle by Chinese airlines to modernize. Air China's parent, China National Aviation Holding Co., tried to buy a stake in rival China Eastern Airlines Co. this year but was rebuffed. 7/16/2008

Singapore shares slumped on Tuesday, along with regional bourses, sending the benchmark Straits Times Index to a four-month low amid heightened concerns the financial troubles engulfing the United States will further destabilize global financial markets. The Dow industrials ended at a two-year low overnight as market watchers worry the U.S. government's plan to shore up mortgage financiers Fannie Mae and Freddie Mac may be too late and that the collapse of U.S. mortgage lender IndyMac last week may not be the last. 7/15/2008

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 Civil Aviation Administration of China

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