Aviation shares flying low


Singapore Airlines' share price lost more than 7 percent on Monday

HONG KONG, China (CNN) -- Shares in listed Asian airlines were among the biggest losers on regional markets Monday, with Singapore Airlines and Taiwan's China Airlines both dropping about 7 percent.

SIA was down 7.1 percent to S$8.45, while China Airlines was off 6.6 percent to NT$9.15.

Other carriers to fall sharply included Hong Kong-based Cathay Pacific, down 5.3 percent, and Korean Air, which lost 4.5 percent.

Singapore Airlines was Asia's most profitable carrier last year, followed by Cathay Pacific.

But they have not been immune to the downturn that has afflicted the aviation industry since the September 11 terror attacks on the United States.

Fall in passenger traffic

Asia-based airlines were hit hard hit by the fall in passenger traffic and now face further declines in the wake of the U.S.-led strikes against Afghanistan that began Sunday.

Qantas, which is seen as being in relatively strong shape because of its domestic stranglehold in Australia after the failure of rival Ansett, finished about 1.75 percent lower Monday.

Malaysian Airlines lost about 2.9 percent, while Thai Airways International was off about 2.7 percent.

With Tokyo's stock market closed Monday for a national holiday, attention Tuesday will be on the region's biggest carrier, Japan Airlines, and the other listed Japanese carriers, All Nippon Airways and Japan Air System.

JAL, which last traded at 286 yen, is already close to its one-year low of 279 yen recorded on October 1. It started the year at 520 yen.

Aircraft orders cancelled

Global air travel has slumped by as much as 30 percent in the past four weeks and a number of large carriers such as Swissair have already hit trouble.

In a report outlining the impact of September 11 on the aviation industry, the International Air Transport Authority said late last month that many carriers were issuing profit warnings and it expected more cancellations of aircraft orders and options.

It said the U.S. domestic market -- which accounted for 32 percent of world passenger traffic last year -- could fall by as much as 10 percent this year.

Transport and defense analysis firm Forecast International last week revised its forecast for the large jet transport market during 2001-2004, predicting the cancellation or deferral of 130 Boeing aircraft and 160 Airbus aircraft.