Jakarta: Market capitalization trends at Asian airlines paint a vivid picture of which carriers investors are betting will continue to ply the skies even as competition reaches new heights.
The Nikkei Asian Review compared the dollar-denominated market caps of more than 30 listed airlines in Asia between the end of August, when crude oil prices began plummeting, and Jan. 30. Although tumbling oil prices are a boon for the industry in the form of lower fuel costs, investors are still being selective about the stocks they pick.
Enjoying a particularly strong market tailwind are mainland Chinese airlines. Three of Asia's 10 largest carriers by market cap as of Jan. 30 were mainland-Chinese operators listed in Shanghai or Hong Kong. Meanwhile the top three state-owned airlines by revenue -- Air China, China Southern and China Eastern -- saw their market values jump by around 50% or more in the five months through January.
U.S. financial services provider Morgan Stanley said these companies will be "the main beneficiaries of depressed fuel prices" because they generally do not hedge their fuel costs. Shares in Spring Airlines, which became the country's first budget carrier to list on the Shanghai exchange, have doubled since the company's market debut on Jan. 21.
Two Indian airlines have also been the focus of similar euphoria. Jet Airways' market cap more than doubled, and SpiceJet's surged by nearly 70%. The fall of Kingfisher Airlines, which folded in 2012 due to cash flow problems, and other domestic rivals has put them in a strong position.
05/02/15 Wataru Suzuki/Nikkei Asian Review
The Nikkei Asian Review compared the dollar-denominated market caps of more than 30 listed airlines in Asia between the end of August, when crude oil prices began plummeting, and Jan. 30. Although tumbling oil prices are a boon for the industry in the form of lower fuel costs, investors are still being selective about the stocks they pick.
Enjoying a particularly strong market tailwind are mainland Chinese airlines. Three of Asia's 10 largest carriers by market cap as of Jan. 30 were mainland-Chinese operators listed in Shanghai or Hong Kong. Meanwhile the top three state-owned airlines by revenue -- Air China, China Southern and China Eastern -- saw their market values jump by around 50% or more in the five months through January.
U.S. financial services provider Morgan Stanley said these companies will be "the main beneficiaries of depressed fuel prices" because they generally do not hedge their fuel costs. Shares in Spring Airlines, which became the country's first budget carrier to list on the Shanghai exchange, have doubled since the company's market debut on Jan. 21.
Two Indian airlines have also been the focus of similar euphoria. Jet Airways' market cap more than doubled, and SpiceJet's surged by nearly 70%. The fall of Kingfisher Airlines, which folded in 2012 due to cash flow problems, and other domestic rivals has put them in a strong position.
05/02/15 Wataru Suzuki/Nikkei Asian Review
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