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Radiation fear prompts fall of airlines shares
By Winny Wang |
March 14, 2011, Monday
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Online Edition
Online Edition
STOCKS of three Chinese airlines fell today on concern that nuclear radiation may hurt air travel to Japan.
Shanghai-based China Eastern Airlines, the country's second-largest carrier, decreased 1.08 percent to 6.41 yuan (98 US cents) apiece in Shanghai today.
Beijing-based Air China, the country's flagship international carrier, fell 1.37 percent to 11.54 yuan and Guangzhou-based China Southern Airlines, the country's largest by fleet size, shed 1.17 percent to 8.43 yuan.
"In a short run, the earthquake and tsunami will have little impact on our operation because many Chinese in Japan want to come back and many Japanese here will go home," said Luo Zhuping, board secretary of China Eastern.
"However, if nuclear radiation worsens in Japan, the travel market will be affected and passenger volume is likely to drop on our China-Japan routes," Luo said.
He said the number of China Eastern flights to Japan accounts for 5-6 percent of its total flights.
Zeng Xu, an analyst at Industrial Securities, said if the China-Japan routes are suspended for a week, Air China will lose 3.7 million yuan; China Eastern will lose 2.23 million yuan; and China Southern will lose 153 million yuan.
"On concern of aftershocks and nuclear radiation, travel demand will decrease sharply in the middle term and domestic carriers will have to divert some flights from Japan routes to domestic routes to offset losses," Zeng said.
"But earthquake is accidental and it won't have great impact on airlines in a long run," Zeng said.
Shanghai-based China Eastern Airlines, the country's second-largest carrier, decreased 1.08 percent to 6.41 yuan (98 US cents) apiece in Shanghai today.
Beijing-based Air China, the country's flagship international carrier, fell 1.37 percent to 11.54 yuan and Guangzhou-based China Southern Airlines, the country's largest by fleet size, shed 1.17 percent to 8.43 yuan.
"In a short run, the earthquake and tsunami will have little impact on our operation because many Chinese in Japan want to come back and many Japanese here will go home," said Luo Zhuping, board secretary of China Eastern.
"However, if nuclear radiation worsens in Japan, the travel market will be affected and passenger volume is likely to drop on our China-Japan routes," Luo said.
He said the number of China Eastern flights to Japan accounts for 5-6 percent of its total flights.
Zeng Xu, an analyst at Industrial Securities, said if the China-Japan routes are suspended for a week, Air China will lose 3.7 million yuan; China Eastern will lose 2.23 million yuan; and China Southern will lose 153 million yuan.
"On concern of aftershocks and nuclear radiation, travel demand will decrease sharply in the middle term and domestic carriers will have to divert some flights from Japan routes to domestic routes to offset losses," Zeng said.
"But earthquake is accidental and it won't have great impact on airlines in a long run," Zeng said.
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