What’s working; what’s not. Airlines in Asia Pacific

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FOXTROTS*

 

What’s working; what’s not. Airlines in Asia Pacific

Our summary of traffic results for the leading airlines in Asia Pacific, excerpts from the current editions of the Travel Business Analyst newsletter, over January-April.

 

Seat sales at biggest FSAs (full-service-airlines) in Asia Pacific (whole-group results for all), in alphabetical order: Air China +9%; Cathay +2%; China Eastern +10%; China Southern +11%; Japan +3%; Singapore +6%.

 

Notes (on notable details):

 

-Air China. International growing almost double the rate of domestic.

-Cathay. Why is the investment world not shouting out Cathay’s bad results? A China-related airline running +2% is unheard of.

 

The group’s management is living in the past when it ruled Hong Kong’s aviation scene. However, it may get relief when its local rival, Hong Kong Airlines, stumbles. Not only is HKA expanding too fast (a la Norwegian), but it is part of China’s troubled HNA group.

 

 

-China Eastern. Unlike Air China, domestic and international growth are in sync.

 

 

-China Southern. The biggest of China’s top-3, yet fastest-growing also. Its international business is 20% bigger than for the other two.

 

 

-Japan. Domestic is hardly growing but +6% for international is like boom time in the Japan market.

 

 

-Singapore. Before, we worried for SAG (Singapore Airlines group), because the main airline looked weak (notwithstanding still-fawning press coverage). SA is still only +2% but it is being pulled along by SAG’s other airlines. That said, Scoot should be higher than its +12%.

 

Total results were helped by SAG’s Silk +10%. We think Silk should not be folded into SA but reworked as SAG’s low-cost-airline. (See our definitions for full-service-airlines, low-cost-airlines, no-frills-airlines.)

 

 

-Others of note: Some surprising falls on international routes. Garuda. And Malaysia is slipping again after returning to growth in 2017 after its two accidents in 2014 (MH370 disappeared flight, MH17 shot down over Ukraine).

 

And Thai; given that Thailand’s visitor business is doing well, is administrative dysfunction at government affecting Thai’s operational efficiency?

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

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July travel stocks’ ups and downs

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July travel stocks’ ups and downs

Travel stocks (US, Asia Pacific, Europe) in July. Airlines: biggest growth, Turkish +24%; biggest fall, Jet India -11%. Hotels: MGM +9%, Shangri-La -13%. Tech: Expedia +11%, Trivago -9%. Others: Royal Caribbean +9%, HNA -17%.

 

Previous month: Airlines: biggest growth, Wizz +6%; biggest fall, China Southern -20%. Hotels: Melia +0.2%, Dusit Thani -18%. Tech: Travelport +6%, eDreams -18%. Others: Walt Disney +5%, Avis -17%.

 

 

Comments:

After a bad June, travel stocks recovered slightly in July, although this is primarily a Dead Cat Bounce. True that fastest Turkish is now back above its end-2017 price (a good +7%), but others are still below. Despite good monthly growth at Air France +12% and Lufthansa +16% (making up the top-3 in fastest-growth), they are nevertheless below their end-2017 prices.

 

At the bottom, Jet (to become Etihad’s 3rd subsidiary to fail?) pushed out Ryanair by a fraction. Investors punish Ryan (and to some extent, other no-frills-airlines) more than full-service-airlines. Look no further than AirFrance-KLM – fastest-grower although still suffering from strikes in France, CEO-less, and losing millions. And probably worse to come, as surely KLM has enough good sense to try to get out?

 

Las Vegas rollers for hotels. MGM was highest, but Sands was 2nd lowest hotel stock at -6%. Life is not so good at Shangri-La either, and it is still below its end-2017 price.

 

The fall at China’s HNA may be blamed on the accidental death last month of its co-founder Wang Jian (although its public face, such as it is for this secretive company, was the other co-founder, Chen Feng; see our PinT, People-in-Travel). But HNA’s stock has been falling most of this year; it is less than half its peak in October 2017.

 

How low can Trivago go? It is now 65% below its 2016 launch price! At that price, it is almost certain to be bought out soon – unless the market is simply waiting for it to run out of funds.

 

 

TBA Travel Stocks Index: World 245, Asia Pacific 106, Europe 218, US 409. Index previous month: World 234, Asia Pacific 105, Europe 214, US 381.

 

 

NVTT (Net Value Travel Tech) Stocks Index: 138; previous month 132.

 

 

Stockmarkets. Biggest growth Bangkok +7%; biggest fall Dublin -2%. Previous month: biggest growth Wellington +3%; biggest fall Bangkok -8%.

 

 

Info from the Travel Business Analyst newsletters. Details in next month’s newsletters.

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.