Aviation Industry (incl Maintenance) 01 (Dec 08 - May 20)

[winston]

Europe's carriers may lose US$1.1b

Losses at European airlines will hit US$1.1 billion this year - almost double the US$600 million estimate made just three months ago, as the euro-zone crisis continues to worsen.


Source: SCMP

[winston]

Safety concerns over pilot shortage

AVIATION An industry forecast that nearly half a million new airline pilots will be needed worldwide over the next 20 years, as airlines expand their fleets.


Source: SCMP

[winston]

not vested

DJ MARKET TALK: Airlines At Inflexion Point; Buy CP, CEA - CIMB

1404 [Dow Jones] CIMB upgrades the airlines sector from Neutral to Overweight, due to attractive valuation; it says airlines have suffered from soft demand and high oil prices, and although the industry is trying to maintain profitability via lower capacity, near-term macro concerns continue to weigh on stocks.

The house says "it would be remiss of us to ignore the possibility that these stocks may get even cheaper," but it believes that the airline industry follows a distinct profitability cycle based on load factors, yields and jet kerosene costs (which comprises 30%-40% of total operating cost) and "we think that these three determinants suggest that the industry could be at a stage where share prices are at an inflexion point."

CIMB's top Buys include Hong Kong-listed Cathay Pacific (0293.HK) and China Eastern Airlines (0670.HK). Cathay is up 0.5% at HK$12.90.


Source: Dow Jones Newswire

[winston]

Sure. Think about getting through the next 3 years before you tcss about the next 20 ..

China needs 5,260 new jets in 20 years

China will need 5,260 commercial planes by 2031 with an estimated market value of some $670 billion, according to a forecast Wednesday from US aviation giant Boeing.

Randy Tinseth, vice president of marketing for Boeing's commercial airplane section, said the Seattle-based company had revised up its expectations from last year, when it predicted China would need 5,000 new planes by 2030, AFP reports.

Between 2012 and 2031, China will account for 15.5 percent of the 34,000 airliners to be sold around the world, according to Boeing's projection.

The manufacturer said it estimated the number of planes in operation around the world in the next two decades would double from nearly 20,000 to nearly 40,000.

Boeing said the raised projection was linked to China's growing economic strength.

"There is a very tight correlation between traffic growth and GDP growth,'' Tinseth told reporters at a presentation of the report in Beijing, adding the rise in rail traffic was not likely to negatively impact the aviation industry.

"Around two percent of passenger traffic has been diverted to high speed rail, while the good news is that high speed rail allows the economy to grow at a little faster rate because you provide the connectivity, and probably at the end of the day, it has a positive net effect on the air transportation system'', he said.

China's air travel is booming. A total of 267 million air passenger trips were recorded in the country in 2010, up 15.8 percent from the previous year, according to official figures.


Source: The Standard HK

[winston]

not vested

DJ MARKET TALK: Strong Demand To Propel China Airline Shares - Daiwa

0912 [Dow Jones] Daiwa says strong air travel during Golden Week, is likely to propel Chinese airline stocks further, noting air travel demand rose by 27% on-year during Golden Week.

"We see this strong growth as a positive for the PRC airlines, as it could indicate that air travel demand in China should remain robust.

We believe the increase would have been even greater if there had been no ad hoc cancellations of traffic to Japan." Daiwa believes the major beneficiary should be China Southern Airlines (1055.HK), given less impact of traffic cancellations to Japan;

However, Air China (0753.HK) remains its top sector pick due to the current low valuations and the long-term growth opportunities from PRC outbound, cargo business and premium traffic.


Source: Dow Jones & Company, Inc.

[winston]

STOCKS NEWS SINGAPORE-Nomura bullish on aircraft MRO sector

Nomura said Singapore aviation maintenance, repair and overhaul (MRO) service providers such as Singapore Technologies Engineering Ltd and SIA Engineering Co Ltd are set to benefit from air traffic growth in Asia Pacific.

ST Engineering shares were flat at S$3.45 while SIA Engineering was unchanged at S$4.19 on Friday.

Commercial MRO business in 2012 is expected to increase 5.7 percent to $49.5 billion from a year earlier and then grow at a compounded annual growth rate of 3.7 percent between 2012 and 2017, Nomura said, citing a consultancy's forecast.

Large, well-capitalised MROs with presence across regions as well as capabilities and competence to develop new product lines are better placed to take advantage of the aviation upturn, Nomura added.

Nomura has a 'buy' rating and S$4.05 target price on ST Engineering, and a 'neutral' call with a S$4.60 target price on SIA Engineering.

Source: Reuters

[winston]

not vested

DJ MARKET TALK: Chinese Airlines' 3Q Could Surprise On Upside - CS

1335 [Dow Jones] Credit Suisse says the negative factors that worked against Chinese Airlines in 1H are dissipating, and after three quarters of sharp profit declines, earnings expectations are low and valuations are substantially below long-term means, hence 3Q results "are likely to surprise the market on the upside."

The house expects 3Q aggregate profits to fall 36% on-year, vs a 47% on-year decline implied by consensus and 75% on-year decline in 1H earnings.

"We believe that consensus hasn't yet factored in translational gains of about CNY1 billion from the USD debt revaluation."

CS tips Air China (0753.HK) as its top pick, as it likes the company's high exposure to growing outbound markets, and recent strength in the CNY could also drive a new round of upward earnings revisions.


Source: Dow Jones & Company, Inc.

[winston]

Cargo airlines losing out to ocean container carriers

Airlines have permanently lost out to ocean container lines, as box carriers grab an increasing share of the freight that was previously moved by air, according to logistics and cargo executives.


Source: SCMP

[winston]

'Britain to Australia in four hours' with new engine

Passengers could fly to Australia in as little as four hours after British scientists invented a new cooling system which they described as "the biggest breakthrough in propulsion since the jet engine".

http://www.telegraph.co.uk/science/scie ... ngine.html

[winston]

not vested

BofAML hikes TP of airlines on promising outlook

Bank of America Merrill Lynch expects air business will slow down over the next five years , with annual growth of 10%-12%, which will be mainly driven by international flights.

The target prices for AIR CHINA (00753.HK), CHINA EAST AIR (00670.HK) and CHINA SOUTH AIR (01055.HK) are hiked from $5.75, $3.15 and $4.15 to $6.35, $3.4 and $4.7 respectively.

The broker also projects more than 10% airport profit growth and reiterates Buy on BEIJING AIRPORT (00694.HK).

Source: AAStocks Financial News