FOXTROTS*

 

October travel stocks’ ups and downs

Better change that heading to ‘October travel stock downs’.

Only seven travel stocks out of the 78 we track did not fall. And three of those were flat; only four grew.

 

Worse for their stockmarkets; none grew. Best performer was Zurich, which fell only -1%.

 

First, though, the figures, for travel stock prices (US, Asia Pacific, Europe) in October:

 

Airlines: biggest growth, United +0.0% (flat); biggest fall, Turkish -26%.

Hotels: Peninsula -2% sic, Wynn -21%.

Tech: LastMinute +17%, Travelport -11%.

Others: EuroTunnel +1%, HNA -34% sic.

 

-Previous month: Airlines: biggest growth, Turkish +17%; biggest fall, Jet (India) -35% sic. Hotels: Dusit Thani +13%, Wynn -14%. Tech: Trivago +28% sic, Travelport -9%. Others: Boeing +8%, Thomas Cook -31% sic.

 

-TBA Travel Stocks Index: World 218, Asia Pacific 88, Europe 191, US 375. Index previous month: World 240, Asia Pacific 97, Europe 214, US 408.

 

-NVTT (Net Value Travel Tech) Stocks Index: 135; previous month 141.

 

-Stockmarkets. All fell – smallest fall, Zurich -1%; biggest fall -13%. Previous month: biggest growth Istanbul +8%; biggest fall India -6%.

 

 

Comments:

 

By segment, the worst performer last month was hotels – no hotel stock grew. Best were travel-tech stocks, although only two of our eight grew.

 

However, those single stocks that we have signalled as ‘worst’ hide more bad news (we cannot see any good news). By segment:

 

 

Airlines.

The only airline stock that grew is in Asia Pacific. But don’t relate India’s Jet Airways’ +21% to good performance, traffic or other. Growth for the stock of this Etihad subsidiary follows speculative buying after market rumours of a possible bid – by US-based Delta. Jet’s price, even after that boost, is still a -73% fall on its end-2017 price!

 

(Jet is not listed as ‘best’ because it is below our minimum-size level, in seats sold, to be included in that category.)

 

Clearly, China’s airlines fell further than others in the region – in double-digits, including for Hong Kong’s Cathay group – possibly because one of the group’s two airlines is Cathay Dragon, which has a big network into China.

 

This would seem to indicate that the China/US trade war is a factor in travel stock prices.

 

Of the two other airlines that fell in double-digits, one is a surprise – Air Asia’s -17%. But perhaps the other is a surprise as well – Thai’s -14%?

 

In Europe, the biggest fall after Turkish was Lufthansa, -17%. That is the airline group we think is easily the region’s best performing (see our October 22 post on our website, and our October 31 Foxtrots blog). All its main airlines – Austrian, Brussels, Eurowings, Lufthansa, Swiss – are reporting strong traffic growth.

 

But after that, no-frills-airlines seem to be hit harder than others. Both Norwegian and Wizz fell double-digits. And if you thought Ryanair would be slammed because of its bad-tempered summer strike season, maybe not. Its -9% was the same fall as at untroubled Easyjet.

 

Then there is Air France-KLM, which has also had a long strike period (on-and-off for more than six months), lost a CEO, appointed another, then one month later said he was ‘interim’ CEO at AF, and will not stay longer than end-2018 (he will stay CEO at AFKL)! Is this the way to run an airline? Yet AFKL’s -5% was almost the best performance in Europe.

 

In the US, all fell double-digit except Delta and United. All are well below their end-2017 price except United – the airline people love to hate. And does Delta’s less-than-most -5% indicate market support for a possible stake in India’s Jet Airways – see above?

 

 

Hotels.

In Asia Pacific, Thailand’s Dusit and China’s Jinjiang also fell double-digit. None grew. In Europe, big play InterContinental fell hardest, -14%. None grew. In the US, the heaviest US players fell furthest, and two big Las Vegas operators (Sands and Wynn) lost most, although for another LV operator, MGM, its -4% was the best among hotels.

 

 

Tech.

Hard to identify any special pattern. The three US owned (two others are US quoted) fell, but two by not much (4-6%) – which was similar to the performance of others. China’s US-quoted cTrip fell -11% but so did others.

 

 

Others.

In Asia Pacific, the big item is that big fall a China’s Hong Kong-quoted HNA. This is worse than some other stocks (and in its businesses, which include airlines and hotels), so is this a vote on its recent developments (see our PinT:People-in-Travel posts)? It is now 67% down on its end-2017 price.

 

In Europe, the biggest falls were for the travel agency groups, Thomas Cook and TUI. In the US, worst sectors appear to be leisure – the four biggest falls were, alphabetically, Avis, Carnival, Hertz, Royal Caribbean. That said, Avis and Hertz are also strong in the business-travel market.

 

 

Stockmarkets.

As noted, none grew. But also falling in double-digits were Hong Kong and Taiwan. Both, of course, are China related. (We track no stockmarket in China itself because we track no travel stock in China; our China-based companies are mostly Hong Kong-quoted.)

 

The fall for markets in Asia was slightly greater than in other regions – but only about two-points and so that may not be indicative. Even the three markets we track in the US fell a combined heavy -8%, meaning the bad news is everywhere.

 

 

 

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.

 

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